The energy sector came to the rescue today, powering the broader markets firmly into the green. Keeping gains in check were technology laggards still reeling from a data hacking scandal.

The good news today was that crude oil prices spiked by about 2%. OPEC officials made statements that recommitted the cartel to easing the global oil glut. The Saudi Arabian-brokered production curtailment is holding firm. Tensions in the Middle East and additional declines in Venezuelan output also were interpreted as auspicious for crude prices.

Over the past year, equities and energy prices have tended to move in tandem, as Wall Street deems strength in the energy patch as indicative of overall economic strength.

On Tuesday, West Texas Intermediate rose $1.37 to close at $63.50 per barrel. Brent North Sea crude rose $1.25 to close at $67.07/bbl. Crude prices now hover at a three-week high. The rise in oil prices provided impetus for stocks across the board.

Facebook (NSDQ: FB) plummeted for a second consecutive day, in the wake of a political scandal that’s hitting not just Facebook but also its social media peers.

A harsh spotlight continues to shine on the Trump-connected data mining firm Cambridge Analytica, which stands accused of purloining the personal details of 50 million Facebook users. The data was used by the 2016 Trump campaign for “psychographic profiling,” to sway a huge swath of the electorate with fake news.

Britain’s Channel 4 News on Tuesday ran the second part of its explosive undercover report on Cambridge Analytica’s dirty tricks on behalf of Trump and other political clients.

Facebook today announced its first executive casualty: the firm’s chief information security officer, who’s getting the boot for failing to protect user data. More changes in Facebook’s top leadership are imminent.

The social media giant is under heavy pressure. The U.S. House Intelligence Committee announced today that the Cambridge Analytica whistleblower who exposed the data breach has been asked to testify before the committee.

FB shares fell 6.77% on Monday and another 2.56% on Tuesday. The tech sector was further reined in today by the decline of Oracle (NYSE: ORCL), after it reported disappointing quarterly operating results.

Cloud revenue at Oracle has slowed, raising concerns about the software firm’s strategic transition from software licensing to cloud services. ORCL shares fell 9.43% today.

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Headline risk still bedevils investors. Interest rates and trade conflict stand out.

The Federal Reserve’s policymaking Federal Open Market Committee (FOMC) started its two-day meeting today. Traders are girding for the first interest rate hike of 2018, which is expected this week.

The markets are nervously eying the FOMC meeting for any signs of hawkishness. New Fed Chief Jerome Powell is expected to steer a middle ground between the hawks and the doves at the central bank, but it all depends on the economic data.

Consumer confidence hit a 17-year high in February. However, retail sales unexpectedly fell between January and February. It was the third consecutive monthly decline, a troubling portent given that consumer spending drives about 70% of U.S. gross domestic product.

The economy is on the verge of getting a double shot of steroids, from the $1.5 trillion tax cut bill and the bipartisan agreement in Congress to boost federal spending by $300 billion. This massive stimulus should keep the economy humming along.

But therein lies the paradox. Injecting all of this help to the late stages of a recovery could generate so much inflation, it prompts the Fed to hike rates four times this year, rather than the planned three hikes. Aggressive Fed tightening typically undermines stocks.

Adding to the skittishness is the Trump administration’s plans for imposing by Friday up to $60 billion in new tariffs on Chinese imports. The White House intends to target technology, telecommunications and intellectual property. These moves would come on top of steep tariffs already signed by the president on steel and aluminum.

The fact is, Trump’s trade restrictions against the two metals would hit neighbor and ally Canada far worse than China. South Korea’s presidential office said Tuesday that steel tariffs would be discussed at the upcoming Group of 7 summit in June, at the behest of Canadian Prime Minister Justin Trudeau. Our friends in the Great White North aren’t feeling the love.

As talks continue this week to renegotiate the North American Free Trade Agreement (NAFTA), another ally that feels maligned is Mexico. Trump’s negotiators have been trying to wring major concessions from Canada and Mexico in return for keeping NAFTA. But Mexico considers the building of a border wall a hostile act.

On Tuesday, the U.S. gave tentative signals that it might compromise on NAFTA. Regardless, Trump’s “get tough” stance on global trade could backfire. Countries once friendly to our nation appear ready to slap retaliatory tariffs on American-made products. The losers would be U.S. companies, jobs and equities.

For today, exuberance in the energy patch lifted investor moods. But headline risk could return and torpedo stocks at any time.

Tuesday Market Wrap

• DJIA: +0.47% or +116.36 points to close at 24,727.27
  
• S&P 500: +0.15% or +4.02 points to close at 2,716.94
  
• Nasdaq: +0.27% or +20.06 points to close at 7,364.30
  

Tuesday’s Big Gainers

• Stoneridge (NYSE: SRI) +16.31%

Electronics supplier impresses with 2018 outlook.

• Timken (NYSE: TKR) +6.68%

Bearings maker raises full-year guidance.

• Telaria (NYSE: TLRA) +4.28%

Demand booms for provider of online digital video ad services.

Tuesday’s Big Decliners

• Westmoreland Resource Partners (NYSE: WMLP) -11.02%

Analysts bearish on coal producer.

• Oracle (NYSE: ORCL) -9.43%

Software firm’s cloud revenue disappoints.

• Facebook (NSDQ: FB) -2.56%

Cambridge Analytica scandal hits social media giant for a second day.

Letters to the Editor

“Well, it’s that time of year. I’m doing my taxes and wondering how to handle reinvested dividends in my mutual fund.” — Deborah K.

Glad you asked! Investors often overlook the potential of reinvested dividends to lower their taxes.

If you’re set up to have mutual fund dividends automatically plowed into buying more shares, don’t forget that each reinvestment boosts your tax basis in the fund. That, in turn, lowers the taxable capital gain (or increases the tax-saving loss) when you redeem shares.

Neglecting to factor reinvested dividends into your basis results in double taxation of the dividends, once in the year when they were paid to you and reinvested and afterwards when they’re included in the sales proceeds.

Tax season is upon us. Want to keep the IRS from eating into your gains? I’m here to help: mailbag@investingdaily.com

John Persinos is managing editor of Personal Finance and chief investment strategist of Breakthrough Tech Profits.