International oil prices hit the biggest one-day drop in four years

On July 31, the Fed decided to cut the benchmark interest rate target by 25 basis points. Since dollar-denominated crude oil often benefits from central bank interest rate cuts, analysts predict that monetary easing will help push up stock prices and commodity prices. However, the market's response was disappointing. Last Thursday, international oil prices fell by nearly 8%, the biggest one-day drop in four and a half years.

On Wednesday, WTI crude oil prices closed at $58.58 a barrel. After US President Trump said that he would impose an additional 10% tariff on the remaining $300 billion of goods and products from China on September 1, oil prices were hit hard. After the news came out, WTI crude oil prices fell as much as 7.9%, or $4.63 per barrel, to close at $53.95. Brent crude oil fell its biggest one-day drop in February 2016, falling to $60.50.

The fall in energy companies' stock prices triggered a fall in the US S&P 500 index. On August 1, the S&P 500 energy sector fell 2.3%, the biggest one-day drop since May. Pioneer Natural Resources and Noble Energy both fell 7%, and oil giant Exxon Mobil fell 2.6%. Oil service company Schlumberger fell 3.7%.