Markets fall, risk rally “running out of steam”

Markets fell on Wednesday.

The S&P 500 fell 0.2 percent, the STOXX Europe 600 fell 0.3 percent and the Nikkei 225 fell 0.4 percent.

Oil prices plunged, with both West Texas Intermediate crude and Brent falling about 4 percent after a report showed that US crude supplies rose for a second consecutive week.

“Just the thought of overproduction in this deteriorating global economic environment suggests, unless OPEC and allies can bridge the agreement gap, markets will head south in a hurry,” said Stephen Innes, managing partner, Vanguard Markets Pte, in a note.

“The risk rally seems to be running out of steam, and there appears to be little room for further upside,” strategists at Morgan Stanley wrote.

However, for the time being, the S&P 500 remains above its 50-day moving average. According to a CNBC article, since 2009, the index has traded positive 90 percent of the time two weeks after it crossed this threshold.