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Grain → Gold → Bitcoin
From Grain to Bitcoin
4,000 years ago, in ancient Mesopotamia, farmers walked into lending houses with grain.
They pledged their harvest as collateral, borrowed what they needed, and went home.
The lenders accepted grain because grain was real, tangible, and universally valued.
Everyone needed it. Everyone understood it.
And so for centuries, that’s what collateral looked like.
Then came land. Then cattle. Then gold. Then paper backed by gold…
And, then paper backed by nothing but trust.
Every generation, the definition of “real value” quietly expanded.
Fast forward to this week.
Fannie Mae — the government-backed giant that underwrites roughly a third of every American mortgage — just announced it will accept bitcoin and USDC as collateral for home loans.
The definition of “real value” just expanded again.
And somewhere, a Mesopotamian grain farmer is either very confused or very impressed.
Here’s the story ⇩
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The $14 Billion Magnet
Before we get to the mortgage news —
There’s something happening to bitcoin right now that explains why it’s been trading sideways and driving everyone crazy.
Tomorrow, $14 billion worth of bitcoin options expire on Deribit.
That’s 40% of all open interest on the platform.
That number sounds alarming.
But it isn’t. At least not in the way you think.
Here’s what actually happens before a major options expiry.
1 Market makers – the institutions sitting on the other side of all those contracts – have to hedge their books.
And the way they hedge creates a very specific gravitational pull on bitcoin’s price.
It pulls toward something called max pain.
2 Max pain is the price level where the maximum number of options expire worthless.
Meaning:
→ maximum loss for buyers
→ profit for sellers
So what do market makers do?
They hedge.
And in doing so, they slowly nudge price toward that level.
👉 This is why bitcoin feels “stuck’… because something is holding it in place.
Right now, that level is $75,000.
Bitcoin is currently trading around $69,000.
The magnet is $6,000 above where the price is sitting.
Sidrah Fariq, global head of retail at Deribit, described it simply: large expiries create a “natural magnet” as hedging flows push spot price toward max pain in the days leading up to expiry.
(Dealers aren’t bullish or bearish. They just can’t afford to be wrong.)
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Which Side of the AI Wealth Gap Will You Be On?
AI is about to split America into two over the next 12 months…
On one side, it’ll make America’s one-percenters richer and more powerful than ever…
But on the other side, it’s set to trap millions of hardworking Americans in financial quicksand…
One ex-hedge fund manager whose team predicted NVIDIA’s rise in 2020 calls this the “AI End Game”…
And he says there are three critical moves every American should make in the next 12 months to protect and grow their wealth through this paradigm shift…
What Happens After The Magnet Turns Off
Here’s the part that actually matters.
Once those $14 billion in options expire tomorrow, the gravitational pull disappears.
And bitcoin snaps back to whatever was already driving it.
The real macro picture right now:
→ Oil above $100
→ Middle East conflict still unresolved
→ ETF flows and broader liquidity as the actual trend drivers
Glassnode analysts flagged something worth noting.
Market makers are currently positioned in a corridor of short gamma — concentrated between $70,000 and $75,000.
Short gamma means price moves get amplified in that zone.
If bitcoin enters that range, moves in either direction become sharper and less predictable.
The put/call ratio sits at 0.63 — more calls than puts, meaning positioning leans bullish.
But bullish positioning in a short gamma zone with geopolitical noise overhead is not a recipe for a quiet Friday.
Watch this space.
Now For The News That Made Everyone Stop Scrolling
Fannie Mae FNMA ( ▼ 8.18% ) will start accepting mortgages backed by bitcoin BTC ( ▼ 2.96% ) and USDC.
The product, launched by mortgage firm Better Home & Finance $BETR ( ▲ 5.41% ) ▲ 5.86% in partnership with Coinbase $COIN ( ▼ 4.26% ) ▼ 4.30%, works like this:
→ You own bitcoin or USDC
→ You pledge it as down payment collateral
→ You get a standard conforming mortgage — identical to any other Fannie Mae-backed loan
→ You never have to sell your crypto
→ No taxable event triggered
And here’s the line from the joint press release that everyone is quoting today:
“If BTC drops in value, the mortgage terms remain unchanged, and no additional collateral is required. Market movements alone never trigger liquidation.” – Better Home & Finance / Coinbase, via Sherwood News
Read that again.
Bitcoin drops 40%.
Your mortgage doesn’t care.
No margin call. No scramble. No losing your home because a macro event hit crypto.
SPONSOR BREAK presented by BehindTheMarkets*
The 1979 Iran crisis helped ignite gold’s greatest bull run in history.
Gold set 54 all-time highs that year.
The mining stocks?
They exploded 1,000%… 3,000%… even 13,000%.
History doesn’t always repeat, but it often rhymes.
One company, right now, is sitting on more gold than the national reserves of most G7 nations…
And it’s still trading at a 99% discount to what it’s actually worth.
The Down Payment Isuue…
The barrier to homeownership for younger generations isn’t income.
It’s the down payment.
A 20% down payment on a median U.S. home requires roughly $85,000 in cash.
A lot of millennials and Gen Z buyers don’t have $85,000 in a savings account.
Some of them have bitcoin.
Max Branzburg, head of consumer products at Coinbase, said it clearly:
“Token-backed mortgages are a major first step to unlocking homeownership for the younger generations that have struggled with barriers to saving for a traditional down payment.” – Coinbase, as reported by Sherwood News
This didn’t happen overnight either.
Nine months ago, William Pulte — director of the Federal Housing Agency — ordered Fannie Mae and Freddie Mac to prepare proposals treating crypto as a reserve asset in mortgage risk assessment.
Today, that proposal became a product.
Back To The Grain Farmer
Here’s the thing about collateral.
It has never been about what’s “real.”
It’s always been about what a sufficient number of people agree to trust.
Grain worked because everyone needed grain.
Gold worked because everyone agreed it was scarce… and held up over time.
Land worked because it couldn’t disappear.
Bitcoin’s case rests on fixed supply, a global settlement layer, and — increasingly — institutional recognition from the entities that run American finance.
Fannie Mae didn’t just accept bitcoin as collateral.
It accepted that a meaningful portion of American household wealth now lives on a blockchain.
That’s a different statement than it would have been five years ago.
Whether bitcoin earns the same multi-generational trust that land and gold earned — that’s still the open question.
But today, the definition of real value expanded again.
It always does.
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The Placebo Worked… Again.
Belief reshapes reality…
In 1968, two psychologists named Rosenthal and Jacobson ran one of the strangest experiments in academic history.
They gave elementary school kids a standard IQ test. Then they told teachers — completely at random — which students were about to “bloom.” Not based on the scores. Just made-up names handed to teachers on a list.
By the end of the school year, the kids on that arbitrary list had significantly outperformed their peers on actual IQ tests.
The teachers hadn’t cheated. They hadn’t even tried. But their expectations had quietly changed how they called on students, how long they waited for answers, how much encouragement they gave. Small signals. Massive outcomes.
The psychologists called it the Pygmalion Effect.
The idea is deceptively simple: belief reshapes reality… because people act as if it is true. And those actions add up until the prophecy comes true on its own.
Now hold that thought.
Because today, two of the biggest stories in the market ran on exactly the same engine.
Here’s the story ⇩
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The 1979 Iran crisis helped ignite gold’s greatest bull run in history.
Gold set 54 all-time highs that year.
The mining stocks?
They exploded 1,000%… 3,000%… even 13,000%.
History doesn’t always repeat, but it often rhymes.
One company, right now, is sitting on more gold than the national reserves of most G7 nations…
And it’s still trading at a 99% discount to what it’s actually worth.
Story One: The Rally That Ran on a Rumor
This morning, President Trump posted on Truth Social that U.S. and Iran had held “very good and productive conversations” over the past two days, and that he was postponing strikes on Iranian energy infrastructure for a five-day window.
Iran’s foreign ministry responded almost immediately: no negotiations. No direct contact. No indirect contact. Nothing.
The market’s response to this actively disputed post?
→ Dow Jones ▲ 631 points
→ S&P 500 ▲ 1.15%
→ Nasdaq ▲ 1.38%
→ Every single sector closed green
→ Crude oil dropped sharply
Airlines went feral.
→ Frontier surged ULCC ( ▲ 9.43% ).
→ Allegiant ALGT ( ▲ 6.87% ).
→ Royal Caribbean RCL ( ▲ 5.81% ).
→ Carnival CCL ( ▲ 5.51% ).
Tesla TSLA ( ▲ 3.5% ) outpaced the rest of the Magnificent 7, up 3.50% — boosted by Elon Musk’s weekend announcement that Tesla and SpaceX are teaming up on the Terafab chip project, which Musk called “the most epic chip-building exercise in history by far.”
Palantir PLTR ( ▲ 6.74% ) jumped after reports that the U.S. military is formalizing its long-term commitment to Palantir’s Maven AI targeting system.
On the flip side, the stocks that had surged because of the conflict — chemical manufacturers and fertilizer companies pricing in prolonged energy shortages — gave some of those gains back:
→ CF Industries CF ( ▼ 3.78% )
→ LyondellBasell LBR ( ▼ 31.03% )
→ Dow Inc. DOW ( ▼ 1.66% )
Now here’s the Pygmalion part.
The belief created its own version of reality, at least for one trading session.
The traders who made money today were the ones who understood that in a headline-driven market, the expectation moves before the facts arrive.
The risk, of course: five days from now, if the window closes with no deal, every one of those gains is up for grabs. The prophecy can unwind as fast as it formed.
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Story Two: The CEOs Who Are Grading Their Own Homework
The second Pygmalion story happening right now is quieter.
But it might be bigger.
1 Mark Zuckerberg wants you to know he’s building an AI agent to help him be CEO.
2 Jensen Huang says he’d be alarmed if Nvidia’s engineers weren’t burning through a quarter-million dollars in AI compute every year.
3 Marc Benioff at Salesforce keeps talking about “digital labor” like it’s already a line item on every company’s balance sheet.
You could take all of this at face value. Or you could notice the pattern.
The people selling the future are making very deliberate, very public claims that they’re already living in it.
→ Meta META ( ▲ 1.75% ) $604.85 › is pushing employees to use internal AI tools aggressively enough that it shows up in performance reviews.
→ Nvidia NVDA ( ▲ 1.7% ) $175.68 › is tying productivity to token consumption — the implicit message being: if your team isn’t spending heavily on AI, something is wrong with your team.
→ Salesforce CRM ( ▼ 0.1% ) $195.20 › is evangelizing a near future where companies manage fleets of “digital workers” alongside humans.
Now, here’s the Pygmalion twist.
Dogfooding?
Silicon Valley has a name for using your own product internally to prove it works: dogfooding.
The original idea was honest. Eat your own cooking, improve the recipe, ship a better product.
What’s happening now is something else.
→ The buyers are still figuring out what AI actually does.
→ The sellers have already declared it inevitable.
→ And the gap between those two positions — confusion on one side, certainty on the other — is where the sale happens.
Here’s where the Pygmalion mechanic kicks in.
Huang’s compute benchmark doesn’t stay inside Nvidia’s walls.
It travels. It gets repeated at board meetings. It shows up in how CTOs justify their own AI budgets — or explain why they don’t have one yet.
Zuckerberg’s flatter org chart stops being a Meta experiment the moment enough executives read about it.
It becomes the template people measure themselves against.
The belief manufactures the norm. The norm manufactures the demand. The demand validates the belief.
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Which Side of the AI Wealth Gap Will You Be On?
AI is about to split America into two over the next 12 months…
On one side, it’ll make America’s one-percenters richer and more powerful than ever…
But on the other side, it’s set to trap millions of hardworking Americans in financial quicksand…
One ex-hedge fund manager whose team predicted NVIDIA’s rise in 2020 calls this the “AI End Game”…
And he says there are three critical moves every American should make in the next 12 months to protect and grow their wealth through this paradigm shift…
But Wait — What Does the Data Actually Say?
Now here’s what the data actually says.
The Federal Reserve Bank of St. Louis surveyed the entire U.S. workforce on AI usage.
Across all workers — including people who don’t use AI at all — generative AI is saving the equivalent of 1.6% of total work hours.
Among active AI users specifically? 5.4% of their weekly hours. About 2.2 hours in a standard workweek.
! 2.2 hours a week, compounding across millions of workers, is genuinely significant.
But it’s not the civilizational shift being advertised on stage at every conference.
The uncomfortable truth per Sherwood’s reporting: they might be both early and self-interested — and also right.
Those three things can all be true at once.
The prophecy is still forming.
Which means we’re in the window where belief is ahead of proof.
And the CEOs selling the belief know exactly where that window is.
The Created Reality
The Pygmalion Effect isn’t a glitch in how humans think. It’s a feature.
Expectations coordinate behavior.
Belief mobilizes action.
What that means practically:
For the ceasefire rally — watch what happens at the end of the five-day window more than what happened today. The belief moved prices. The facts will settle them.
For the AI trade — the question isn’t whether AI works. It’s whether the expectation of AI has already been priced in, or whether the productivity data catching up to the hype is still an alpha opportunity.
In both cases, the Rosenthal and Jacobson lesson holds:
The kids on the list didn’t know they were on the list. They just responded to how people treated them.
The market doesn’t know what’s true either. It just responds to what it’s told to expect.
Don’t forget to to cast your vote 👇
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Why More U.S. Oil ≠ Cheaper Gas?
It sounds simple but it isn’t.
One of our readers, sent us a note yesterday that stopped us mid-scroll.
” I started driving in the late ’70s and can remember the odd or even days. Whatever your license plate ended with an even or an odd number then that was the day you could get gas.“
Shea, you just described the last time the world ran out of patience with the Middle East and oil in the same sentence.
And here we are again.
→ Brent crude briefly topped $118 this morning.
→ European gas prices spiked 30% overnight.
And markets are repricing everything. Fast.
But to understand why, we need to take a quick detour into Oil 101. Don’t worry. It’s actually interesting.
Not all oil is the same. And right now, that difference is worth $50 a barrel — the widest gap ever recorded for the same underlying commodity.
Here’s the story ⇩
So What Even Is “Crude”?
Everyone keeps saying crude is up.
Up is doing a lot of heavy lifting in that sentence.
Because there isn’t one crude oil. There are dozens. And right now, depending on which crude you’re talking about, you’re looking at completely different crises unfolding simultaneously.
Think of it like coffee.
Ethiopian single-origin and Brazilian blend are both coffee. Same plant, different soil, different price, different buyer. Nobody calls them separate commodities. But a trader can tell you exactly why one costs $50 more than the other today.
Here’s your cheat sheet:
Crude oil — the broad category. Like saying “coffee.” Means nothing until you specify which one.
WTI (West Texas Intermediate) — American crude. Pulled from fields in Texas, Oklahoma, New Mexico, Louisiana, and North Dakota. The lightest and sweetest of the major benchmarks. Sweet means low sulfur content — easier and cheaper to refine into gasoline. (Not sweet as in tasty. Please don’t taste crude oil.) Travels by pipeline to Cushing, Oklahoma. Landlocked. Stays mostly domestic. Currently trading around $95.80 — up a modest 0.3% today.
Brent — North Sea crude. Slightly heavier. Sits on the water, loads onto tankers, moves freely to refineries across Europe and Asia. The global benchmark. When the news says “oil hit $100” — they mean Brent. Briefly topped $118 this morning before pulling back to around $113.
Oman crude — Middle Eastern crude. Heavier still. Historically priced close to Brent. Now trading at a massive premium because it’s physically trapped on the wrong side of a war zone.
That WTI-Brent spread – just $5 at the end of February – has now blown out to over $20. And the gap between WTI and Middle Eastern crude benchmarks is even wider. Over $50 — with Oman trading near $153 while WTI sits below $96.
Same commodity. Completely different crisis depending on where you are.
(The market is essentially charging a geographic tax for being on the wrong side of a 21-mile strait.)
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Why Brent Is Exploding While WTI Stays Relatively Calm
Here’s the mechanism…
The Strait of Hormuz is 21 miles wide at its narrowest point. Through it flows roughly 20% of global seaborne oil trade — primarily from Saudi Arabia, the UAE, Iraq, and Qatar.
It is now effectively closed.
Not through a physical blockade — through something almost more powerful. Insurance withdrawal is doing the work that a physical blockade has not. The outcome for cargo flow is largely the same. Premiums have made transit economically unviable for most commercial operators. The strait is technically open. Almost nobody is using it.
Hundreds of tankers sit idle on both sides.
WTI doesn’t care. American oil moves through pipelines. It never needed the strait. Refiners in Cushing are fine.
Brent is a different story entirely. Disruptions in the Strait quickly reduce availability for refineries in Europe and Asia, leading to higher bids for seaborne oil. WTI remains more sheltered, reflecting domestic production and local inventory levels that haven’t tightened similarly.
So global refiners – desperate for barrels that don’t require crossing a war zone – are bidding Brent up to wherever it needs to go to find supply.
And it keeps going up.
Who’s Actually Getting Hurt
Here’s what the WTI-Brent spread is really telling you.
It’s a real-time map of who’s exposed to this crisis — and who isn’t yet.
Wide spread = the world is fracturing along energy lines.
Right now that spread is the widest it has ever been.
And the countries feeling it hardest aren’t in Europe or America.
84% of the oil that flows through the Strait of Hormuz goes to Asia. China gets a third of its total oil supply through that strait. Japan, South Korea, India — same story.
They’re not paying $96 for a barrel. They’re paying $152. And climbing.
Analysts warn that the longer the Strait stays closed, the more Asia’s supply shortage becomes everyone’s problem. Supply chains don’t respect national borders. The factories making your phone, the ships bringing your goods, the airlines pricing your flights – they all run on Brent-priced oil.
The gap that looks like a trading signal today could be the early warning of a global problem tomorrow.
Watch the spread.
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The 1979 Iran crisis helped ignite gold’s greatest bull run in history.
Gold set 54 all-time highs that year.
The mining stocks?
They exploded 1,000%… 3,000%… even 13,000%.
History doesn’t always repeat, but it often rhymes.
One company, right now, is sitting on more gold than the national reserves of most G7 nations…
And it’s still trading at a 99% discount to what it’s actually worth.
But here’s the twist.
Over 60% of U.S. refineries were built to process heavy crude — the kind imported from Canada, Mexico, and the Middle East. Not the light shale oil American wells are pumping at record levels right now. So the U.S. exports its own light crude to refineries abroad that can use it efficiently, and imports heavy crude from elsewhere to feed its own refineries.
source: AFPM
America is simultaneously an oil exporter and an oil importer.
Which is also why any talk of simply keeping more U.S. oil at home tends to sound better than it works.
At first glance, restricting exports seems logical. If energy prices are rising, why not keep more American crude inside the country and lower costs at the pump?
Because that’s not how the system is built.
The U.S. now produces massive volumes of light, sweet shale oil — the kind many refineries abroad are happy to process. But many American refineries, especially along the Gulf Coast, were designed decades ago to run heavier, sour crude imported from places like Canada and Mexico.
So forcing more domestic crude into the U.S. market wouldn’t magically lower gasoline prices. It would widen the discount between WTI and Brent, distort refinery economics, and leave refiners with more of the wrong kind of oil.
In other words: more barrels at home doesn’t automatically mean cheaper fuel.
Sometimes it just means a bigger mismatch.
And then there’s gold.
Usually when everything breaks, gold goes up. That’s the script.
Not today.
→ The SPDR Gold ETF fell ▼ 4.80%.
→ iShares Silver Trust dropped ▼ 5.90%.
Why?
The speed of the Iran war energy shock has nudged traders to completely reprice whether the Federal Reserve can deliver any rate cuts this year. Yields on shorter-maturity US Treasury notes shot higher — reflecting expectations for tighter monetary policy. And Fed Funds futures now suggest traders no longer see the Fed cutting rates in 2026 at all.
Implied odds of a June cut plummeted from 60% on February 23 to just 16% this morning.
So why does that kill gold?
Normally gold is seen as a hedge on inflation — which might suggest it should rise alongside expectations for persistent price increases. But longer-term Treasury yields actually fell on Thursday — suggesting the market thinks a Fed shift toward inflation-fighting would likely result in some decline in growth and inflation over time. Less future inflation means less need for inflation hedges.
In plain English: the market isn’t just pricing in an energy shock.
It’s pricing in a Fed that gets so aggressive about fighting inflation that growth slows down on the other side.
Less growth. Less inflation eventually. Less need for gold (maybe?).
The mining stocks are already feeling it.
→ Anglogold Ashanti › ▼ 7.38%
→ Newmont › ▼ 7.67%
→ Wheaton Precious Metals › ▼ 5.48%
→ Agnico Eagle › ▼ 5.66%
The market isn’t panicking about the crisis itself.
It’s calculating what comes after it.
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Most investors will be locked out until AFTER the big announcement.
But I’ve discovered a “backdoor” that lets you grab a pre-IPO stake in SpaceX right now.
I’m revealing the ticker for free.
What To Watch From Here
Nobody knows how long the strait stays closed.
Nobody knows if the attacks on Qatar’s LNG facilities are a one-time escalation or the opening move of something bigger.
What we do know is what to watch.
✓ Watch the WTI-Brent spread. It’s the most honest signal in the market right now. Widening means the fracture is deepening. Narrowing means supply is finding its way back. You don’t need to follow fifteen indicators. Just watch the spread.
✓ Watch European gas prices. Dutch TTF futures spiked 30% overnight. Europe is the most exposed major economy after Asia. If TTF starts cooling, it means Qatari LNG is finding workarounds. If it keeps climbing, winter in Europe gets very expensive very fast.
✓ Watch the Fed language. Rate cut odds just collapsed from 60% to 16% for June. If Powell starts signaling that the energy shock is temporary and transitory, markets will reprice cuts back in fast.
✓ The spread. We said it once. We’ll say it again.
It’s the thermometer. Everything else is just noise around it.
Don’t forget to to cast your vote 👇
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The Terrible, Horrible, No Good, Very Bad Meeting
Getting flashbacks?
In 1973, King Faisal of Saudi Arabia made a decision that broke the global economy.
Not with bombs. Not with armies.
With a pipeline valve.
He shut off oil exports to the West during the Yom Kippur War – and within weeks, gas lines stretched around city blocks, Nixon capped the national speed limit at 55 mph, and Americans were carpooling for the first time in their lives.
The price of oil quadrupled in four months.
The inflation it triggered lasted a decade.
Here’s the thing nobody talks about: the companies that already had energy locked up didn’t just survive. They got rich.
Because scarcity has a very simple economic logic.
The people who already own the thing everyone suddenly needs… win.
Fast forward 53 years. The Strait of Hormuz – the 21-mile chokepoint that carries 20% of the world’s oil – just closed.
And that same logic is playing out again. In real time.
Here’s the story ⇩
Day Three
That’s where we are with the Hormuz crisis.
Three days in, and oil is marching toward $100 a barrel like it has somewhere to be.
(It does. It’s going to $100.)
The broader market is already doing the math on what that means.
→ S&P 500 › ▼ 0.68%
→ Dow Jones › ▼ ~1%
But here’s what’s interesting.
While almost everything sold off today, one corner of the market quietly had a very good Wednesday.
→ VLO ( ▲ 1.06% ) (Valero Energy)
Refiners. The unsexy, industrial, nobody-talks-about-them-at-dinner-parties refiners.
Up.
Because when supply gets choked off, the companies that already have the infrastructure, the inventory, and the contracts don’t scramble. They just raise their prices and collect the premium.
It’s the 1973 playbook. Almost line for line.
SPONSOR BREAK presented by BehindTheMarkets*
The 1979 Iran crisis helped ignite gold’s greatest bull run in history.
Gold set 54 all-time highs that year.
The mining stocks?
They exploded 1,000%… 3,000%… even 13,000%.
History doesn’t always repeat, but it often rhymes.
One company, right now, is sitting on more gold than the national reserves of most G7 nations…
And it’s still trading at a 99% discount to what it’s actually worth.
The Number That Actually Matters
Everyone’s watching $100 oil (crude) like it’s a scoreboard.
But $100 isn’t just a round number.
It’s the level where consumer behavior historically breaks.
Gas hits $4 (national average) a gallon?
→ People download carpooling apps. (Yes, again.)
→ Airline bookings slow.
→ Road trips get reconsidered.
→ And companies that pass costs to consumers — restaurants, retailers, anyone with thin margins — start getting squeezed in ways that show up in earnings three months later.
We’re not at $4 gas yet.
But the market is already pricing in the possibility. Which is why the S&P fell today without a single bad earnings report.
Just vibes. Expensive, oil-soaked vibes.
Then The Second Punch Landed…
source: Orlando Sentinel
The PPI showed up and made everything worse.
As if the Hormuz crisis wasn’t enough to deal with.
February’s Producer Price Index — which measures what businesses pay before they pass costs to you — came in at +0.7%.
The expectation was 0.4%.
(The market does not like surprises. Especially inflationary ones.)
And the part that really stung: core PPI, which strips out food and energy, also ran hot.
Meaning this isn’t just an oil story. The inflation is broader. It was already building before a single tanker got rerouted.
Hot inflation is not a perfect future.
When input costs rise faster than pricing power, margins compress.
Chipotle can only raise burrito prices so many times before customers start making rice at home. (It happens. It’s called demand destruction and it is deeply unglamorous.)
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And then, right in the middle of all of this, Jerome Powell held a press conference.
The decision: hold rates at 3.5%–3.75%.
No cut. No shock. No drama.
Except there is quite a bit of drama, actually.
Because here’s the Fed’s problem in one sentence: you cannot fix a geopolitical oil shock with an interest rate.
Raising rates doesn’t reopen the Strait of Hormuz. Cutting rates doesn’t bring inflation down when the world’s energy chokepoint is closed.
The Fed is essentially a very powerful institution that is completely powerless over the thing currently driving prices.
(They would like you not to focus on that.)
So instead, they updated their forecasts.
→ Headline inflation revised up to 2.7%.
→ Core inflation revised up to 2.7%.
→ Growth nudged slightly higher.
And the dot plot — the Fed’s internal forecast of where rates are going — still shows one cut in 2026.
Barely.
The room is split almost perfectly in half:
→ 7 officials see zero cuts this year
→ 7 officials see one cut → The rest are spread across two, three, and four cuts
One very optimistic official sees four cuts coming.
(That person is having a fundamentally different 2026 than their colleagues.)
Before the Iran war started, markets had a full rate cut priced in by July.
Today? A full cut isn’t priced in for all of 2026.
That’s how fast the calculus flipped.
The Subplot Nobody Can Ignore
This was Powell’s second-to-last meeting as Fed Chair.
President Trump has been calling for rate cuts publicly. (He said this week that “a third grader would cut rates now.” A sentence that will age in one of two very different directions.)
His nominee to replace Powell — Kevin Warsh — is waiting for Senate confirmation. One Republican senator has vowed to block it until a DOJ criminal probe into Powell is dropped. A federal judge just threw out the subpoenas behind that probe. The DOJ is appealing.
It’s a lot.
None of it changes monetary policy today. But it is the background noise surrounding the institution currently making the most consequential economic decisions of the year.
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So What Do You Do With All Of This?
Two scenarios. Pick your world.
World A: The Strait reopens in days. Oil pulls back. Inflation fears fade. The Fed finds room to cut in the back half of the year. Growth stocks recover. The market forgets this happened by Memorial Day.
World B: The closure drags on. Oil stays elevated. Core inflation stays stubborn. The Fed stays frozen. You get slower growth and higher prices simultaneously — which is the economic combination nobody has a clean solution for.
History gives you one data point to sit with.
The 1973 embargo lasted five months.
The inflation it triggered lasted ten years.
Nobody is calling for that outcome today.
But the market is quietly starting to ask whether it should start asking the question.
And that question alone is worth more than any rate cut.
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2007 All Over Again.
It’s getting interesting…
In 2007, Google Maps had just signed Garmin’s death warrant.
Why buy a $300 GPS device when your phone does it for free?
Garmin’s stock dropped 25% in a single day. Analysts called it. Investors panicked. The obituary was basically written.
But here’s what actually happened.
Google Maps didn’t kill the navigation industry. It became the navigation industry. Every app, every rideshare, every food delivery driver on earth now runs on top of it. Google didn’t win by building the best car. They won by becoming the road everyone else drives on.
One platform. Every vehicle. Infinite leverage.
(Garmin, by the way, is worth $20 billion today. The GPS eulogy aged poorly.)
That model — own the infrastructure, let everyone else build on top — just became the most expensive arms race in the history of transportation.
Because two of the most powerful companies on earth just placed massive bets on who gets to be the Google Maps of autonomous vehicles.
And neither of them was supposed to be in this business.
Here’s the story ⇩
NVDA ( ▼ 0.25% ) Stepping Onto the Road
At its GTC event this week, Nvidia announced expanded partnerships with both Uber and Lyft — positioning itself as the full technical backbone of the robotaxi industry.
Not just the chips. The hardware, the software, the AI models, the whole stack.
Their Alpamayo AI models and DRIVE Hyperion platform are now powering a growing fleet of companies racing toward full autonomy. Jensen Huang said it plainly at GTC:
“We have technology. We have our platforms. We have a rich ecosystem.”
That’s platform-company language. Deliberately.
Nvidia isn’t trying to build the best robotaxi. They’re trying to become the engine inside all of them. The difference sounds subtle. The business model implications are enormous.
The timeline is moving faster than most expected:
→ Nvidia-powered Level 4 robotaxis on Uber in LA and San Francisco by 2027 → Scale to 28 cities globally by 2028 → Amazon’s Zoox — already running on Nvidia since 2017 — testing in 10 markets right now
Elon Musk said Nvidia wouldn’t apply “competitive pressure” on Tesla for at least five years.
The market looked at those numbers and respectfully disagreed.
→ UBER › $78.85 (▲ 5.61%)
→ LYFT › $14.23 (▲ 5.02%)
→ TSLA › $398.10 (▲ 0.64%)
The platform partners surged. Tesla shrugged. Make of that what you will.
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Meanwhile, Tesla Is Building Its Own Intel
While Nvidia is busy becoming the platform, Tesla is doing something equally audacious.
Refusing to need one.
This week, Elon Musk announced Terafab — Tesla’s own in-house semiconductor fabrication plant. The goal: produce 100 to 200 billion AI chips per year.
A car company. Building a chip foundry. From scratch.
Why? Because Musk looked at every chip supplier on earth — including Nvidia — and reached one conclusion:
“Even when we look at the best-case output of all of our key suppliers… it’s not enough.”
So Tesla is building their own. Which means Tesla just quietly became a semiconductor company. Which means they entered Nvidia’s lane just as hard as Nvidia entered theirs.
(Two companies. Switching lanes simultaneously. At highway speed. No indicators.)
The numbers behind Terafab reflect just how serious this bet is:
→ Morgan Stanley projects $35–45 billion in total capex
→ On top of Tesla’s already-sizeable $20 billion 2026 spending plan
→ Tesla’s most expensive project ever — the Nevada battery plant — cost ~$10 billion over a full decade
This isn’t a side project. This is Tesla making a decade-long commitment to never depending on anyone else’s silicon again. Vertical integration at a scale the auto industry has never seen — and frankly, never imagined.
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In the Wrong Lane — Or Just a Different Road?
Here’s what makes this moment genuinely fascinating.
Both companies are chasing the same prize — dominance of the autonomous vehicle era. But they’ve built completely different theories of how to win it.
Nvidia’s playbook: be the infrastructure. The more companies that build on their platform, the more powerful and entrenched it becomes. Every new robotaxi partner isn’t just a customer — it’s another brick in the moat. This is the Google Maps model, and it’s already working.
Tesla’s playbook: own everything. The car. The software. The data. And now, the chips. When you control the full stack, you don’t pay tolls to anyone. And when Tesla’s humanoid robots eventually outnumber their cars — they’re projecting 100 million units annually — having your own chip supply isn’t just smart. It’s the only way the math works.
Two massive bets. Backed by tens of billions of dollars. Zero hesitation.
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The Bull Case
source: phenomgenetics
The bull case for Tesla is longer-dated — but potentially even larger. If Terafab delivers at scale, Tesla doesn’t just cut chip costs. They become the only fully vertically integrated autonomous vehicle company on earth. Raw silicon to finished ride, no dependencies, no middlemen, margins most companies can only dream about.
One company is building the road everyone drives on.
The other is building a car that doesn’t need anyone else’s road.
Both are right. Both are winning. And neither of them was supposed to be here.
That’s what makes this the most interesting lane swap in tech history.
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In a Gold Rush… Sell Pickaxes
The Jensen Effect…
Every technological boom eventually runs into a bottleneck.
For the oil industry, it was pipelines.
For the internet, it was bandwidth.
And for artificial intelligence…
It might be memory.
This week, investors were watching Nvidia’s big GTC conference, where CEO Jensen Huang outlined the next phase of the AI boom.
Yes — the man in the leather jacket.
But interestingly, the stocks moving the most ahead of Huang’s speech lately haven’t been Nvidia.
They’ve been the companies supplying memory chips.
Here’s what’s happening ⇩
The Quiet Movers
While the spotlight stays on Nvidia, a few of the companies feeding the AI machines have been catching a bid.
➝ Micron MU ( ▲ 4.89% )
➝ Sandisk SNDK ( ▲ 8.54% )
➝ Western Digital WDC ( ▲ 4.62% )
➝ Seagate STX ( ▲ 4.68% )
These companies produce the memory and storage hardware that AI systems rely on to move massive amounts of data.
AI Infrastructure / Networking
➝ Marvell Technology MRVL ( ▲ 4.48% )
➝ Amphenol APH ( ▲ 1.74% )
These firms build connectivity and networking components that link AI chips and servers together inside massive data centers.
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The Stock Getting Extra Attention
One name drawing particular interest lately: Sandisk $SNDK ( ▲ 0.6% ) .
The stock has become something of a momentum favorite among retail traders, after delivering a staggering ~1,200% gain over the past year.
Even after recent volatility, Sandisk is still up roughly 170% this year, keeping it near the top of the S&P 500’s performance rankings.
Meanwhile, another potential catalyst is approaching.
Micron reports earnings on Wednesday, and several Wall Street analysts have already started raising price targets ahead of the release.
Over the weekend, Micron announced it completed the acquisition of a new manufacturing site in Taiwan, expanding its ability to produce advanced memory chips.
Moves like this highlight how quickly demand for AI hardware is expanding.
When companies start adding new manufacturing capacity, it usually means the industry expects demand to stay strong.
Building the next generation of AI systems isn’t only about designing better GPUs, but also about expanding the entire supply chain around them.
Memory, storage, networking, power, and cooling are all becoming critical parts of the equation.
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The Speed Bumps
Training large AI models requires enormous computing power.
But compute alone isn’t enough.
These systems also need massive amounts of memory to move and store data.
Think of GPUs as the engine of AI.
Memory is the fuel line.
If data can’t move fast enough between chips, the entire system slows down.
A Pattern Traders Remember
This isn’t the first time memory stocks have reacted to Huang’s comments.
Back in January, during Nvidia’s keynote at the Consumer Electronics Show in Las Vegas, Huang pointed to memory bandwidth as one of the main constraints slowing the AI build-out.
The market responded immediately.
The following day:
→ Sandisk surged nearly 30%
→ Western Digital and Seagate posted double-digit gains
→ Micron rallied alongside them
In other words, when Huang highlights a constraint in the AI system… traders start bidding up the companies solving it.
That’s why memory stocks are getting attention again just ahead of Nvidia’s conference.
Investors are watching to see whether memory once again becomes part of the conversation.
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The Big Question
Before the keynote, traders were already positioning for what Jensen Huang might say.
A few themes were at the top of the list:
→ AI Inference
The shift from training AI models to actually running them at scale across real-world applications.
→ Nvidia’s Expanding Stack
Beyond GPUs — including CPUs, networking, and full data-center systems.
→ AI Infrastructure Spending
Confirmation that hyperscalers like Microsoft, Meta, Amazon, and Google are still pouring billions into AI compute.
→ Efficiency Gains
How Nvidia plans to deliver more performance with less power, hardware, and cost.
Because at this stage of the AI boom, the question isn’t just how powerful the chips are.
It’s how efficiently the entire system can run.
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Houston, We Have a Fuel Problem
Insurance Always Feels Expensive… Until You Need It
Back in the early 2000s, most airlines simply paid whatever fuel cost that day.
If oil went up… profits went down.
But Southwest Airlines played a different game.
Instead of buying fuel at market prices, the airline locked in prices years in advance using hedging contracts.
At times, Southwest had 70–80% of its fuel needs hedged — far more than most competitors.
And then oil exploded…
Between 2004 and 2008, crude prices surged from roughly $30 to over $140 per barrel.
For most airlines, it was a financial nightmare.
For Southwest , it was a windfall.
The company reportedly saved about $1.3 billion in 2008 alone thanks to its fuel hedges — one of the most famous risk-management wins in corporate history.
For years, business schools taught the strategy as a masterclass in hedging.
Fast forward to today.
Southwest eventually stepped away from that strategy — gradually reducing hedging over the past decade before largely exiting it around 2024–2025.
And now oil volatility is back.
Jet fuel prices have surged sharply this year, with some estimates showing prices jumping more than 80% during the recent energy shock tied to Middle East tensions.
Here’s the story ⇩
The Problem
Airlines run on extremely thin margins.
And fuel is one of their biggest costs.
So when energy prices spike, airline profits can disappear almost overnight.
This year, jet fuel prices have surged sharply — with some estimates showing prices jumping more than 80% during the recent geopolitical shock tied to the Middle East conflict.
Without hedges in place, airlines now have only two options:
• absorb the cost (destroying margins)
• raise ticket prices quickly
That’s why United Airlines’ CEO recently warned that fare increases could come fast if fuel stays elevated.
And the stock market has already noticed.
Airline stocks have come under pressure recently as investors weigh the impact of rising fuel prices on operating costs.
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What Is a Hedge?
Let’s simplify the concept.
A hedge is basically financial insurance.
It’s a trade designed to protect against an unwanted price move.
For airlines, the unwanted move is simple:
Oil going up.
So they hedge by locking in fuel prices using derivatives like futures or options.
Example:
An airline agrees to buy fuel next year at $80 per barrel.
Two outcomes can happen:
Scenario 1 — Oil jumps to $120
The hedge wins.
The airline still pays $80.
Scenario 2 — Oil falls to $60
The hedge loses.
They’re stuck paying $80 while competitors pay $60.
So hedging removes uncertainty…
…but it also removes the chance to benefit from favorable price moves.
Why Many Airlines Stopped Hedging
Over the past decade, most airlines abandoned fuel hedging.
Why?
Because oil prices stayed relatively stable for long stretches.
And hedging can become expensive when prices fall.
Airlines like:
• American Airlines
• Delta
• United
all moved away from large hedging programs years ago.
Even Southwest — once the industry’s biggest hedging advocate — eventually followed.
The logic was simple:
Why pay for insurance if prices aren’t volatile?
That worked…
until volatility came back.
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History Has a Sense of Humor
Energy shocks have changed airline business models before.
During the 2008 oil spike, airlines introduced checked baggage fees to offset fuel costs.
After the 2022 energy surge, many low-cost carriers pivoted toward higher-spending travelers who are less sensitive to rising fares.
If fuel prices remain high again, the industry may need to adapt once more.
Only a Few Airlines Can Stay Profitable
According to analysts at UBS, if fuel prices stay elevated, only three major U.S. airlines are expected to remain profitable:
→ Delta Air Lines DAL ( ▲ 1.45% )
→ United Airlines UAL ( ▲ 0.08% )
→ Southwest Airlines LUV ( ▲ 0.36% )
Even then, analysts say profits would likely be very thin.
Most other airlines would likely struggle to make money at current fuel prices.
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China dominates 98% of the world’s gallium supply—an element crucial for next-gen chips and AI tech.
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✈️ The Market Already Smells Trouble
If you want to see how investors feel about airlines right now, look at the sector ETF.
The U.S. Global Jets ETF (JETS) — which holds major airlines like Delta, United, and American — has dropped about 18% in the past month.
The market knows the equation. ⇩
Oil price ↑ → Airline stocks ↓
source: Yahoo Finance
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Bullish for Fertilizer Stocks? 👀
It’s been 13 days…
For the past 13 days, markets have been trading a familiar playbook.
The conflict in the Middle East began on February 28, and almost immediately the usual market reactions kicked in.
Oil spiked.
Gold rallied.
And investors began watching the Strait of Hormuz — the narrow shipping lane that carries roughly 20% of the world’s oil supply — like hawks.
When a geopolitical shock threatens global energy flows, markets tend to react quickly.
That part wasn’t surprising.
What happened next was.
On Thursday, the biggest winners in the S&P 500 weren’t oil companies.
They weren’t defense contractors either.
Instead, four chemical and fertilizer companies suddenly climbed to the top of the leaderboard:
→ CF Industries CF › $136.90 (▲ 13.26% )
→ Mosaic MOS › $31.81( ▲ 7.58% )
→ Dow, Inc. DOW ›$37.55 ( ▲ 9.30% )
→ LyondellBasell LYB › $73.98 ( ▲ 10.38% )
Not exactly the stocks most people associate with geopolitical crises.
But the reason they rallied actually reveals something important about how commodity markets really work.
Here’s the story ⇩
The Ingredient Behind Everything
At first glance, the move looks strange.
A war in the Middle East sends oil markets into chaos… and fertilizer companies rally.
But the connection becomes clearer once you look at the most important input in the chemical industry.
It isn’t oil.
It’s natural gas.
Companies like CF Industries, Mosaic, Dow, Inc., and LyondellBasell use natural gas to produce ammonia, nitrogen fertilizers, plastics, and a wide range of industrial chemicals.
In many cases, natural gas isn’t just the fuel used to power the plants.
It’s the raw material used to make the products themselves.
source: tradingeconomics
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At a $1.5 TRILLION valuation… that would be 3,000 times bigger than Amazon’s IPO.
This is a “millionaire-maker” event…
Why U.S. Producers Have the Edge
And this is where the conflict begins to reshape the economics of the industry.
Many chemical producers in Europe and Asia rely heavily on imported natural gas, much of which travels through global shipping routes linked to the Middle East.
But U.S. producers operate under a different set of economics.
Thanks to the shale boom, the United States has some of the cheapest natural gas in the world.
So when global energy markets tighten, the cost advantage suddenly shifts.
American producers can keep manufacturing at relatively stable costs…
while competitors overseas face rising input prices.
And that dynamic gives U.S. chemical companies something investors love:
pricing power.
source: Voronoi
The Citi Upgrade
That’s exactly the story Wall Street analysts began highlighting this week.
Citi upgraded Dow, Inc. and LyondellBasell, arguing that disruptions across LNG facilities and petrochemical plants in Europe and Asia could lead to months of tighter supply.
Their conclusion was simple:
➝ Fewer global competitors mean stronger margins for companies that can still produce efficiently.
And right now, many of those companies happen to be based in the United States.
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Watch the presentation to learn why investors are paying attention.
The Fertilizer-to-Food Pipeline
Two of the biggest winners in this rally — CF Industries and Mosaic — aren’t just chemical companies.
They’re among the world’s largest fertilizer producers.
And fertilizers sit near the very beginning of the global food supply chain.
Farmers rely on nitrogen, potash, and phosphate fertilizers to grow crops efficiently. Without them, yields drop sharply.
Which means fertilizer prices quietly influence the cost of producing everything from corn and wheat to soybeans and vegetables.
When fertilizer becomes more expensive, farmers face a difficult choice:
➝ Absorb the higher costs…
or
➝ raise the price of what they sell.
Most of the time, those higher costs eventually work their way through the supply chain.
1 First to grain prices.
2 Then to food producers.
3 And finally to consumers.
In other words, the same geopolitical shock that lifted chemical stocks this week could eventually show up somewhere else entirely.
At the grocery store.
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The Bull vs Bear Case
The rally in chemical and fertilizer stocks ultimately comes down to one variable:
energy costs.
As long as global natural gas prices remain elevated — while U.S. gas stays relatively cheap — American producers could maintain a meaningful cost advantage over competitors in Europe and Asia.
That advantage would allow companies like CF Industries, Mosaic, Dow, and LyondellBasell to keep capturing stronger margins and pricing power.
In this case, the bull vs bear case depends more on what happens next in global energy markets.
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Did Anyone Check Gas Prices?
Inflation Was Fine…
The inflation report just dropped this morning.
And at first glance, everything looked… calm.
Consumer prices rose 0.3% in February, exactly what economists expected.
On an annual basis, inflation held steady at 2.4%.
Core inflation — the version that strips out food and energy — came in at 2.5%.
For investors hoping inflation is cooling, it looked like good news.
There’s just one small problem.
The data is already outdated.
Because the inflation report reflects February prices — before the Middle East conflict sent oil markets into chaos.
Since then, gasoline prices have jumped roughly 60 cents per gallon nationwide.
Which means the inflation report markets are celebrating today may already belong in the past.
Here’s the story ⇩
Calm Waters (For Now)
The February Consumer Price Index painted a picture of an economy where inflation pressures are slowly easing.
Housing costs — the largest component of CPI — rose 0.2%, continuing the gradual moderation seen over the past several months.
Core inflation also cooled, increasing 0.2% month-over-month, in line with economists’ forecasts.
In other words, the inflation trend looked stable.
At least for now.
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That’s when I’m predicting Elon Musk will announce the SpaceX IPO… in what Bloomberg is calling “the biggest listing of ALL TIME.”
And I’ve found a ‘backdoor’ way to grab a Pre-IPO stake… BEFORE Elon makes the big announcement!
At a $1.5 TRILLION valuation… that would be 3,000 times bigger than Amazon’s IPO.
This is a “millionaire-maker” event…
Eggs Down, Coffee Up.
Inflation at the grocery store is a tale of two shopping carts.
Egg prices have plunged 42% from last year’s spike, providing one of the biggest sources of relief for consumers.
But other items are still moving the opposite direction.
Coffee prices have surged 18%, beef is up 14%, and sugar prices have climbed 9%.
So while headline inflation may look stable, the reality at the checkout line can still feel very different.
source: Yahoo Finance
The Energy Wild Card
Energy has always been the unpredictable variable in inflation.
Electricity prices are already 4.8% higher than a year ago, while natural gas prices have climbed 10.9% over the same period.
Gasoline prices had actually been declining earlier this year.
But that changed quickly once oil markets reacted to the escalating conflict in the Middle East.
Since the end of February, gasoline prices have surged by roughly 60 cents per gallon.
None of that appears in today’s inflation report.
Which means the next CPI print could tell a very different story.
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The Fed’s New Problem
February’s inflation report suggested price pressures were gradually cooling, giving the Federal Reserve some breathing room after two years of aggressive tightening.
But energy markets may complicate that picture.
If oil prices remain elevated, higher fuel costs can ripple through the economy — raising transportation expenses, increasing production costs for businesses, and eventually pushing consumer prices higher.
That’s exactly the type of shock policymakers have been trying to avoid while guiding inflation back toward their 2% target.
And with the Federal Reserve meeting scheduled next week, the timing couldn’t be more delicate.
Inflation had been cooling.
But the energy shock may not be finished.
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The Bull vs Bear Case
The Bull Case:
Inflation really is cooling.
In that scenario, the inflation fight keeps trending in the right direction.
The Bear Case:
Energy has a way of ruining otherwise good inflation data.
That’s the nightmare scenario for the Fed.
Inflation had been cooling… but an energy shock could slow — or even reverse — that progress.
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Dramatic Turnaround
Oil Just Pulled a 25% U-Turn
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On February 28, the average price of gasoline in the United States was about $2.98 per gallon.
Ten days later, it is $3.48, about 16% higher.
That might not sound dramatic at first glance.
But across the country, that sudden jump means Americans are now spending roughly $187 million more per day just to fill their gas tanks.
The reason sits thousands of miles away—Strait of Hormuz.
So oil prices exploded.
Crude surged $119 per barrel for the first time in four years.
And just before the market close… the story changed.
President Trump told CBS News the conflict in Iran was “very complete, pretty much.”
And oil prices collapsed.
From $119 overnight, it finished the day near $89.
U.S. benchmark crude fell back to roughly $85 per barrel.
That’s an intraday swing of more than 25%.
Here’s the story ⇩
The Mood Flipped.
Equities recovered their losses and turned green.
source: Yahoo
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Why Oil Spikes Make Markets Nervous
When oil moves a little, markets barely notice.
When oil moves a lot, everyone start paying attention.
History shows that when Brent crude rises or falls more than 30% within a month, something unusual is happening beneath the surface of the global economy.
Nearly every time this kind of move occurs, stock market volatility increases sharply.
And in many cases, a recession follows soon after.
source: Sherwood
Oil isn’t just a commodity — it’s a warning signal.
Where It Was Felt Most
source: American Automobile Association (AAA)
Gas stations across the United States are already starting to show the impact.
States Seeing the Biggest Gas Price Spikes
→ Indiana: ▲ +23%
→ Ohio: ▲ +22%
→ Oklahoma: ▲ +21%
→ Texas: ▲ +20.5%
These states started with relatively cheaper gasoline — often below $3 per gallon — leaving more room for prices to climb.
They’re also deeply connected to the Gulf Coast refinery network, which processes crude priced against global oil benchmarks.
So when Middle East disruptions push crude prices higher, the shock travels quickly through pipelines and refineries straight to local pumps.
Where Prices Have Risen Less
Drivers in the western United States have seen much smaller increases.
→ Hawaii: ▲ +3%
→ Washington: ▲ +6%
→ Oregon: ▲ +7%
→ Alaska: ▲ +9%
→ Idaho: ▲ +9%
The reason is structural.
Much of the West Coast operates somewhat outside the Gulf Coast fuel network, meaning shocks tied to Middle Eastern oil tend to arrive more slowly and less directly.
Those states also started with higher gasoline prices, which reduces the percentage change.
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The Early Market Reaction
Some sectors have already started to feel the pressure.
Airlines
Airlines are typically among the most sensitive sectors to rising fuel prices, since jet fuel represents one of their largest operating costs.
But after oil reversed lower during the session, airline stocks managed to recover some ground.
→ JetBlue JBLU ( ▲ 0.67% )
→ United Airlines UAL ( ▲ 2.66% )
→ Alaska Air ALK ( ▲ 2.27% )
Industrial & Manufacturing
→ Eastman Chemical EMN ( ▼ 1.04% )
→ Illinois Tool Works ITW ( ▼ 0.21% )
→ Owens Corning OC ( ▼ 1.57% )
Manufacturers that rely heavily on energy inputs or transportation costs showed modest declines.
Consumer & Retail
→ Macy’s M ( ▼ 1.59% )
→ Kohl’s KSS ( ▼ 2.12% )
→ Best Buy BBY ( ▼ 1.08% )
Meanwhile, retailers tied to middle-class spending weakened slightly as investors anticipated tighter household budgets if gasoline prices continue rising.
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The Story Isn’t Over
For now, oil has retreated from its peak after comments suggesting the conflict could end sooner than expected.
But the oil market is still reacting headline by headline.
One moment it’s pricing a supply shock.
The next moment it’s pricing a diplomatic resolution.
Until the situation becomes clearer, volatility is likely to remain high.
Research from JPMorgan suggests that if the Strait of Hormuz remains blocked, global production cuts could climb toward 4.7 million barrels per day within weeks.
And some strategists believe crude could still reach $150 per barrel if supply disruptions worsen.
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