Wall Street hit the panic button after Brent crude soared as high as $119 per barrel at one point today. And while the selloff subsided by the time markets closed, investors’ nerves are understandably frayed.

You already know what high oil prices mean for the average person: inflationary pressure that will likely boost the price of gas, travel, groceries, and basically everything else. But Wall Street analysts are more concerned that the whispers of “stagflation” haunting their nightmares could soon become a reality.

Here’s what the Street is saying:

• JPMorgan’s head of global market intelligence Andrew Tyler turned “tactically bearish”— forecasting a 10% correction in the S&P 500 if the conflict doesn’t end soon.
• Ed Yardeni of Yardeni Research now puts the chances of a 1970s-style stagflation market meltdown at 35%.
• But it’s not all bad vibes: “There is the potential for faster inflation and slower economic growth, with assets focusing on different aspects thus far,” wrote Adam Hetts, Global Head of Multi-Asset at Janus Henderson. “However, risks remain two-sided. US political pressures means that a quick “victory” should not be ruled out. Asset prices, driven by energy prices, are likely to swing violently as investors alter their expectations for either outcome.”

So, how are the pros handling this:

• “We favor Quality and Healthcare for those seeking defensive hedges,” wrote Morgan Stanley CIO Mike Wilson in a note today. “Our baseline remains that further weakness in the near term sets up an opportunity to add to the cyclical trades we prefer over the intermediate term across Financials, Industrials, Consumer Discretionary and Small Caps.”
• And, as always, stay diversified across sectors and assets. “Ultimately, diversification, staying invested according to risk tolerance, and focusing on long-term financial goals remain the best strategies,” explained Bernstein Private Wealth Management’s Strategic Investment Solutions team in a note.

It’s not just the US, either

The sense of panic spread beyond just American markets.

Japan’s Nikkei 225 stock index plunged the most today since April’s tariff-related meltdown. Over in South Korea, the oil crisis is causing the government to impose a fuel price cap for the first time in 30 years. Perhaps surprisingly, China might be set up the best to handle an oil shock, given it has large crude stockpiles and has diversified its energy sources.

The bottom line: Everyone making predictions is just giving their best guess. “Situations like this demonstrate the value of well-diversified multi-asset portfolios,” explained Hetts. “Geopolitical events are rarely easy to gain complete clarity on, with the current US administration apparently embracing uncertainty as a negotiation strategy. What we can take away from the events of the last few days is that it is likely the conflict could last longer than many had initially hoped.”

In other words, the market whiplash is just beginning.—LB

🟢 What’s up

• Hims & Hers surged 40.79% after Novo Nordisk agreed to distribute its weight loss drugs through the company’s platform, ending a public feud between the two firms.
• Xenon Pharmaceuticals soared 49.64% on positive results from its Phase 3 study of azetukalner in focal onset seizures.
• Lumentum jumped 14.73%, Vertiv climbed 9.33%, Coherent jumped 7.04%, and EchoStar gained 3.46% after joining the S&P 500.
• United Therapeutics rallied 10.67% after its board authorized a $2 billion share repurchase program.
• Strategy climbed 4.06% as the company disclosed it spent $1.28 billion purchasing bitcoin last week, marking its largest buy in more than a month.
• Talkspace surged 7.56% after Universal Health Services agreed to acquire the company for $5.25 per share in a deal valued at $835 million.

What’s down

• Olema Pharmaceuticals plunged 25.75% as a Phase 3 breast cancer drug trial by Roche failed to meet its primary goal.
• Venture Global sank 7.77% thanks to fears that LNG deliveries will remain disrupted for the foreseeable future.
• Jefferies Financial Group fell 0.34% after Western Alliance Bancorporation filed a lawsuit tied to a $126.4 million loan linked to the collapse of First Brands Group.

It used to be that the only fear tech industry insiders had was how quickly AI was going to take developers’ jobs. Now, they’ve turned their attention much further abroad.

While a war in Iran may seem to have little to do with the AI trade at first glance, there’s growing concern that higher energy prices will have a domino effect on the entire tech industry. The most immediate risks are the rising cost of semiconductor chip fabrication—a very energy intensive process—as well as the cost of shipping said chips once they’ve been manufactured. It’s a particular problem for Asian companies like TSMC, the world’s largest chip maker, which singlehandedly consumes 9% of Taiwan’s electricity every year—electricity that the island nation generates via oil imports that are suddenly looking very expensive.

South Korean companies SK Hynix and Samsung Electronics are also headquartered in a country that’s extremely reliant on oil imports, and both could be forced to cut production as crude costs rise. But it’s not just Asian companies that may feel the sting: TSMC, SK Hynix, and Samsung all supply key components for Nvidia’s chips, leaving the AI kingmaker exposed to a potential production slowdown.

To be clear, it’s not a problem yet. Taiwan is well aware of its reliance on overseas oil, and has shifted most of its crude imports from the Middle East in favor of the US over the last few years, which could put TSMC in a better position than others. But if Nvidia’s chip supply chain starts showing signs of strain thanks to higher costs or slower production (or both), it could spell trouble for the AI trade’s lynchpin—and the rest of the market.—MR

After years of legal noise, the Justice Department and Live Nation may finally be turning the volume down. The two sides just reached a settlement in their blockbuster antitrust case, pending approval from a judge later today.

Under the settlement, the company agreed to several structural changes:

• Live Nation will sell up to 13 amphitheaters
• Third-party platforms such as SeatGeek and StubHub will be allowed to sell primary tickets through the system
• Ticketmaster will be barred from punishing venues that choose a competing ticketing provider

The crowd isn’t cheering

Some context: In 2024, the Justice Department, joined by 40 states, accused Live Nation Entertainment of illegally dominating the market for major concerts and ticketing. Regulators argued the company’s power stems largely from its 2010 merger with Ticketmaster, which created a vertically integrated giant spanning artists, venues, promotion, and ticket sales. Had the government prevailed in court, it could have forced the businesses to separate.

In theory, the settlement should be good news for concertgoers, as reducing monopoly power could help lower ticket prices. In practice, however, the largely unregulated resale market continues to push prices higher, while critics say Live Nation remains the titan of the industry, leaving consumers with few alternatives.

That’s why states including New York and California, along with more than two dozen others, have declined to support the settlement so far, even after the company offered roughly $280 million to states that sign on.

Wall Street applauds

For investors, on the other hand, the development is great news. Despite the prospect of increased competition, the settlement removes a major legal overhang that has weighed on sentiment for years, easing uncertainty around Live Nation’s future. Shares rose 6.19% this afternoon.

Wall Street analysts were quick to respond with renewed optimism. Goldman Sachs and Guggenheim Partners reiterated Buy ratings on the stock, while Rothschild & Co’s Redburn unit upgraded shares to Buy from Neutral. Wells Fargo also initiated coverage with an Overweight rating.

If approved, the deal could finally bring clarity for the company. But with multiple states still opposing the settlement, the saga may not be over yet, and investors should watch closely.—SY

• Nothing to see here: President Trump purchased $1.1 million of Netflix bonds over the past three months amid the streaming platform’s push to buy Warner Bros. Discovery.
• Eric Trump and Donald Trump Jr. are backing a drone tech company that sells military equipment to the Pentagon—and it’s merging with a publicly traded golf course company.
• Nasdaq is partnering with crypto exchange Kraken to enable 24-hour tokenized stock trading.
• Prediction market traders can now bet on the direction of the S&P 500. Whatever happened to good ol’ fashioned options?
• Anthropic just sued the Trump administration after the company was blacklisted by the Pentagon.
• Treasury Secretary Scott Bessent has declared war on a slew of Wall Street researchers, most recently JPMorgan’s Natasha Kaneva.

Economic reports: The NFIB small business optimism index and a look at existing home sales

Earnings announcements: Oracle, Nio, AeroVironment, and Kohl’s