U.S.-Iran talks stall... Approaching 'unheard of' levels in the oil market... This is a gray swan... Semiconductor euphoria continues... Other sectors worth looking at... Do not touch SpaceX stock until you've done this...
About that 'ceasefire'...
As we've been saying, it doesn't look like one.
This past weekend, there was another round of back-and-forth attacks between the Iranian and U.S. militaries in the Persian Gulf, including right in the Strait of Hormuz.
This morning, the X account Open Source Intel had a good summary...
About the only thing not going on in the Strait of Hormuz is tanker traffic as we once knew it. The U.S. military says it has guided around 70 ships through the strait over the past three weeks. Pre-war, more than 100 ships traveled the route per day.
And a "deal" to end immediate hostilities remains elusive.
In the past few days, President Donald Trump reportedly sent back edits to an Iranian proposal with "significant" changes on a deal. The sticking points included the matter of Iran's nuclear material and ambitions and reopening the Strait of Hormuz without "tolls."
Those are big details...
And so, a stalemate in the region continues, with occasional flare-ups among boats, missiles, and drones. And now, the sides might be further apart than ever...
Iranian state media reported today that Iranian officials will stop exchanging messages with the U.S. and are again threatening to keep the Strait of Hormuz blocked. Trump has previously said if Iran doesn't agree to a deal, the bombs will start falling again.
Today, Trump said he didn't care if negotiations are over. "I think we've been talking too much, if you want to know the truth. I think going silent would be very good, and that could be for a long time," he said, before later posting on social media that talks were continuing.
Risks for even more serious global energy supply shocks continue...
We've repeatedly written in these pages about the global oil supply deficit – which amounts to tens of millions of barrels per day. Roughly 20% of global supply is out of the market due to the Strait of Hormuz blockade. And existing Middle East infrastructure has also been damaged.
It has been three months since the start of the war in Iran, and about 1.5 billion barrels of oil that would have been used are out of the system. The global and U.S. energy markets are now nearing an inflection point...
Late last week, as our friend Rob Spivey from our corporate affiliate Altimetry pointed out to us, ExxonMobil (XOM) senior vice president Neil Chapman warned at an industry conference that "we're approaching unheard of inventory levels... really, really low levels" of crude oil.
According to the latest weekly report from the U.S. Energy Information Administration, commercial crude-oil inventories, excluding the Strategic Petroleum Reserve ("SPR"), fell by 3.3 million barrels to 441.7 million in the week ending May 22. The SPR fell by 9.1 million barrels.
Refiners are running at 95% capacity, but exports and imports were down by 1.2 million barrels per day and 804,000 barrels per day, respectively. The U.S., meanwhile, consumes about 21 million barrels of petroleum and crude oil per day. As the Wall Street Journal reported...
Gasoline inventories saw a 15th straight weekly draw, and were down by 2.6 million barrels at 211.6 million barrels, or 6% below the five-year average. Gasoline demand rose by 489,000 barrels a day to 9.3 million barrels a day leading up to the Memorial Day weekend, which marks the unofficial start of the summer driving season.
Chapman said his timeline for a significant inventory crunch is two or three weeks...
Once you get to that point, then you'll see the price shoot up... Up to $150, $160. he models would tell you that... I think crude being in this sort of $90 to $110 for the last [six weeks] has really been mitigated by running down inventories.
It can't last forever. So we'll see what happens. Predicting this and the exact timing, it's always a challenge. But that's the way we see the picture.
It's a picture worth thinking about. We're just a few weeks away from what could be a massive oil price spike, which would make this spring seem like the good old days. A 50% pop in oil prices would assuredly take a chunk out of the stock markets as expectations for a higher inflation environment grow.
Then there's the other part...
As Chapman also noted, if oil prices go as high as they could, "demand destruction brings it back into balance." Consumers buy less. Producers create more.
That'll mean lower prices, eventually, but to get there, it means people and businesses spending less on other things, and less U.S. and global economic activity overall, which brings a whole other set of recessionary risks into play for businesses.
It's a gray swan...
Oil prices were up as much as 6% to 7% today on the latest news, including the reports of stalled negotiations. But as we write, Brent crude and West Texas Intermediate futures are around $95 and $92 per barrel, down from their wartime peaks so far.
The futures market, as a whole, continues to trade as if the worst is in the rearview mirror and that continued oil disruptions aren't likely. You can get late 2026 Brent crude futures in the mid-$80 range.
"It's a little hard to explain," Chevron CEO Mike Wirth said in an interview with Bloomberg on Friday. "There's this belief that the end is near... That has kept the back end of the curve lower than it otherwise might have been."
He noted we're already seeing physical supply shortages in Asian markets (as we've noted here). "We haven't reached a crisis point yet," Wirth said, but he added that "it will take months" to return to some semblance of normal, with some 1,000 ships still stranded in the Persian Gulf.
The more I (Corey McLaughlin) think about it, this is a "gray (or grey) swan" event.
It's not a major unpredictable development in the way that author Nassim Taleb described a "black swan," but global oil inventories drying up is a major event that's still considered unlikely. At least, enough people with enough money in the market are behaving that way. But perhaps we're just starting to see a turn...
The great divide...
We've been telling you about the "tech and semiconductor versus everything else" divide in the market over the past few months. It has been strong enough to buoy the cap-weighted indexes – and we continue to see indicators of it...
Today, while nearly 300 of the S&P 500 Index components traded lower and nine of 11 sectors were lower, the U.S. benchmark was up 0.3% and closed at a record.
Only energy stocks (up 2%) and tech (up 2.5%) were higher, and nothing seems to be able to knock semiconductor stocks from their march higher.
Semiconductor sentiment and trading activity is extremely frothy... Here's a note from 7th Key Financial founder Josh Taylor...
Our colleague and Ten Stock Trader editor Greg Diamond agrees...
Greg has been warning of a top in semiconductors and tech stocks.
In his Weekly Market Outlook for subscribers this week, Greg highlighted another huge "divergence" between the tech-heavy Nasdaq Composite Index and financial stocks, among others, while comparing today's setup with previous major market "tops."
Existing subscribers and Stansberry Alliance members can get the details from Greg here.
Opportunities are starting to show up elsewhere...
Today, DailyWealth Trader editor Chris Igou also pointed out the large divergence between tech and everything else in his monthly "sector checkup" for subscribers.
As he wrote, only five of the 11 major S&P 500 sectors are up in the past three months. Six fell lower... and "if you haven't had money in the top-performing sectors, you are trailing the S&P 500 Index," Chris said.
But he also noted he expects "some of the laggards to bounce back this month," specifically healthcare and materials stocks, which have shown stronger technical signals lately. Existing subscribers and Alliance members can find the details here.
The great space race might not be what you think...
To close things out today, we have one more big idea we want to talk about. You got a taste of it over the weekend in a pair of Masters Series essays from Stansberry Venture Technology editor Dave Lashmet...
SpaceX has been all over the news as Elon Musk's rocket/AI/satellite company is close to going public (and, as we discussed last week, its shares are on a fast track to the major indexes and folks' retirement accounts whether anyone wants them or not).
But while a lot of folks are enamored with the idea of sending rockets to the moon and Mars, there's much more going on when it comes to the "space race."
Dave, whose picks are all over our Stansberry Research Hall of Fame, has been focused on finding other, little-known potential winners as investors turn their attention to space.
Dave was the first person we heard talk about a relatively small company called Nvidia (NVDA) several years ago – before the stock went parabolic. Now, Dave says the biggest opportunities lie in the companies supplying the critical new infrastructure for the space race. So, before you think about buying a share in SpaceX, you should check out what Dave has got to say.
On Thursday, he's revealing a "make or break" twist to the SpaceX IPO... and Dave will unveil a company with technology he says is 10 times better than SpaceX's, and it's linked to a Pentagon project that could deliver massive profits, even if Musk's plans crash and burn.
You can register for this free event here.
New 52-week highs (as of 5/29/26): Altius Minerals (ALS.TO), Arm Holdings (ARM), Broadcom (AVGO), Pacer U.S. Cash Cows 100 Fund (COWZ), Cisco Systems (CSCO), Datadog (DDOG), Leonardo DRS (DRS), iShares MSCI Emerging Markets ex China Fund (EMXC), Hewlett Packard Enterprise (HPE), iShares Convertible Bond Fund (ICVT), Illumina (ILMN), Nucor (NUE), Palo Alto Networks (PANW), Invesco High Yield Equity Dividend Achievers Fund (PEY), ProShares Ultra Technology (ROM), and ProShares Ultra S&P 500 (SSO).
In today's mail, more thoughts on the SpaceX IPO, which we covered on Thursday and in Friday's mailbag... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"With about 50% of the $1.8B owned by early investors (excluding those shares owned by Musk) that will become free for trading in only few months, imagine the overhang [a large block of assets expected to be sold soon]...
"My experience is that institutional investors are reluctant buying when there is a large overhang. It will be interesting to follow." – Subscriber Serge F.
All the best,
Corey McLaughlin
Baltimore, Maryland
June 1, 2026
