Minutes from the Fed's last meeting and housing starts are two key events for markets Wednesday, as traders watch to see whether oil and stocks can continue to diverge.
Stocks rallied hard Tuesday, with the S&P 500 up 1.7 percent to 1,895, and the Dow up 1.4 percent to 16,196. With Friday's sharp gains, West Texas Intermediate futures were 1.4 percent lower, at $29.04 Tuesday after hitting a high earlier in the day on a report that Saudi Arabia, Russia and two other producers agreed to 'freeze' production levels. Those gains were quickly erased as traders realized there would be no reduction in supply.
But stocks kept rallying, even as oil sank, breaking a recent pattern of moving mostly in lockstep. "I think it's a trial separation. I don't it's a full divorce," said Art Cashin, director of floor operations at UBS. "If (oil futures) break $29 tomorrow, let's see if they pressure (stocks)." Cashin said stocks moved higher as traders focused on other things, like the positive retail sales report from last week. He said the $12 billion Apple debt offering also helped sentiment.