Energy sector was the prime culprit among other stocks including materials and biotech, that pulled S&P 500 and Dow Jones lower recently. S&P 500 fell 2.2% and Dow eased 2.9% during the week ended 24 July. S&P 500 suffered biggest weekly decline since March. 

The ongoing second quarter results are showing bleak performance since the third quarter of 2012.

According to FactSet, the energy sector was the largest contributor to S&P 500 index loss. John Butters, a senior analyst at FactSet explained that  the energy sector is reporting the largest year-over-year decline in earnings and revenues of all 10 sectors.

"This sector is also the largest contributor to the year-over-year decline in both earnings and revenues for the S&P 500 as a whole", he continued.

Earnings at energy companies were down 54.4% and revenues dropped 38.2%. This quarterly earnings season is significantly impacting the S&P500 index.

With already 187 companies in the S&P 500 composition registered poor performance during the second quarter, the combined actual results with projected estimates are 2.2% lower, while blended revenues were four percent lower.  

The energy sector is under-performing the overall index and as a result, its weightage in the index composition is weakening. The energy sector weightage in S&P 500 index was down by more than a fifth from 10.8% to  8.2%. 

According to David Blitzer, Chairman of the Index Committee, SP Dow Jones Indices, the more energy underperforms, the smaller the exposure.

"There is one caveat. When oil prices bottom out and begin to rise, the exposure to oil and energy will have been minimized. At the exact moment, when an investor wishes to be over weighted in energy then it would be under weighted."

The two-day meeting of Federal Open Market Committee (FOMC) will take off Tuesday. The outcome of this meeting coupled with latest quarterly results will set the tone for market's next direction. Earnings from energy majors Exxon Mobile Corp, Chevron, etc, have greater impact on the S&P 500.

Investors are hoping for encouraging earnings reports from energy companies, but so far it has not materialized. 

The earnings from the energy sector during second quarter 2015 reported 54% drop so far indicating biggest losses among other sectors. The revenues of energy companies fell over 38% during the second quarter. 

Investors are looking to FOMC for positive cues. FOMC is a committee within the Federal Reserve System, is charged under United States law with overseeing the nation's open market operations (i.e., the Fed's buying and selling of United States Treasury securities).