Oil prices are spiking, while stocks are sliding, amid fresh Middle East war fears. Gold and silver are pulling back, while interest rates and the US dollar are rising modestly.
We’re back in a “rising oil price” world after marathon peace talks in Pakistan failed over the weekend. Vice President JD Vance and the US negotiating team couldn’t agree to terms with Iran’s parliamentary speaker Mohammad Bagher Ghalibaf and that country’s delegation.
President Trump responded by announcing a blockade of Iranian ports that takes effect this morning. The move is designed to choke off exports of Iranian oil – most of which have been heading to China. But that will increase competition for oil supplies from other parts of the world, a key reason why oil futures are surging again.
AAL, LUV, UAL (YTD % Change)
Data by YCharts
Speaking of energy prices, airlines are hiking fares and bag fees to cope with surging jet fuel costs. American Airlines Group Inc. (AAL) is now charging $50 for the first checked bag on domestic flights, up $10, while Southwest Airlines Co. (LUV) is raising its fee 28% to $45.
Airlines are also cancelling thousands of flights globally due to the conflict’s impact on fuel costs and supply, with United Airlines Holdings Inc. (UAL) cutting about 5% of its previously planned flights in Q2 and Q3. Shares of AAL, LUV, and UAL are down 26.1%, 3.8%, and 13.7% year-to-date, respectively.
Finally, the first-quarter earnings reporting season is getting underway on Wall Street – with Goldman Sachs Group Inc. (GS) reporting a 19% jump in profit. Earnings per share of $17.55 easily topped estimates of $16.34 thanks to a 27% jump in equity trading revenue and a 48% surge in M&A advisory fees. Still, weaker-than-expected results in its fixed income, currency, and commodities division left investors wanting more. Goldman stock pulled back in early trading.
