What the Iran War Will Teach the Market
The Strait of Hormuz is 'completely open' – sort of... Why the S&P 500 shrugged off $90-plus oil... Two overriding truths in investing... High quality and risk management... My refinery rabbit hole... What the Iran war will teach the market...
The U.S. has been at war with Iran for 48 days...
For about the first 30 days, the market hated it.
From Friday, February 27 – the day before the war started – to March 30, the S&P 500 Index fell about 8%.
Since then, the S&P 500 is up about 12%. Amid signs of the war easing, it hit its first new all-time high since January 27 on Wednesday – Tax Day, April 15.
And today, Iran said it would no longer block shipping through the Strait of Hormuz... the 21-mile-wide choke point for 20% of the world's crude oil.
I (Dan Ferris) am not saying you should or shouldn't trade the market based on your ideas about the war. That's just gambling.
I'm just noticing that the market is a funny beast...
We're constantly told that it hates uncertainty. So maybe it makes sense that when a war first breaks out, markets sell off on the brand-new, very negative event. After all, war means destruction. And disrupted oil supplies mean higher prices.
Maybe the market likes the certainty of ships once again passing through the Strait of Hormuz. Maybe it believes President Donald Trump when he says he thinks the war is "very close to being over." Whatever the reason, the market has clearly changed its mind about the war.
And yet, as I'll explain later in this Digest, the market and I may be closer to agreement than it looks. I'm seeing signs that the market is coming around to one of my highest-conviction ideas.
The strait matters for more commodities than just oil...
More than 40% of the global sulfur supply passes through the Strait of Hormuz. So does roughly 14% of global refined petroleum products, 19% of liquefied natural gas, and 25% to 35% of ammonia (used in fertilizer production that feeds about half the planet).
The global economy does not want it closed.
Today, Iranian Foreign Minister Seyed Abbas Araghchi posted on the social platform X that all was well... for now. As he wrote:
In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire, on the coordinated route as already announced by Ports and Maritime Organisation of the Islamic Rep. of Iran.
Trump went even further, posting on Truth Social:
Iran has agreed to never close the Strait of Hormuz again. It will no longer be used as a weapon against the World!
The market is eating up the president's every word...
The S&P 500 jumped more than 1% this morning, and oil prices fell double digits.
That's a pretty optimistic response...
First, even with the strait "open," the U.S. is still blockading Iran's shipping. If any ship from any country is caught heading to or from an Iranian port, the U.S. Navy will stop it and board the vessel. The vessels are told to turn around and that if they don't comply, they will be boarded and seized.
That reduces energy shipments – and could provoke Iranian retaliation against anyone else's ships that try to edge past.
Major shipping companies said today that they're not eager to try just yet.
What's more, no promises about the strait are creating refineries or oil wells. No back-and-forth about shipping blockades is rebuilding all the energy infrastructure that was wrecked in the past 48 days.
Even before today, the market was looking on the bright side...
Yesterday, Brent crude oil (the international benchmark) was around $98 per barrel, with American West Texas Intermediate costing $93 per barrel. These prices reflect the wartime disruptions to the energy market.
After all, the global economy effectively runs on oil... or to be more accurate, the dizzying array of products we get from crude oil. Think of gasoline, diesel fuel, jet fuel, heating oil, propane, butane, bunker fuel for ships, ethylene and propylene for plastics, synthetic fibers (like polyester, nylon, and acrylics), synthetic rubber, asphalt, tar, motor oil, greases and lubricants, paraffin (wax), and more.
And even for products that don't have oil as an input, higher fuel prices mean higher transportation costs.
So expensive crude oil means a lot of other stuff gets more expensive.
And lately, this has seemingly become perfectly OK with the S&P 500... after it wasn't OK for about a month.
You could explain the market's apparent complacency as we've done before...
Maybe it's not a matter of investors thinking $90-plus oil is OK. Maybe they just don't care about it because they rarely even remember that they're constantly buying stocks.
That's very likely the posture of the average 401(k) account holder. In my own 401(k) account, I'm not overly exposed to the stocks that make the S&P 500 go up and down. I've chosen industrial, value, energy, and gold stocks.
But I'm the odd duck.
Most people blissfully pour their savings into the S&P 500 every time they get paid. Roughly $20 trillion of assets are indexed or benchmarked to the S&P 500. And 401(k)s and other retirement accounts are stuffed to the gills with those types of funds.
Maybe America's 401(k)s aren't going to lose half their value anytime soon. But their returns from here on out could sorely disappoint if folks don't think twice about where they allocate future retirement dollars.
I have some ideas about how to fix that...
I recently did two great interviews for upcoming episodes of the Stansberry Investor Hour podcast, both filled with excellent ways to get outside the normal S&P 500 bets most folks have in their retirement accounts.
The first was with Pete Carmasino, chief market strategist at our corporate affiliate Chaikin Analytics. Pete is a trader who relies on a combination of fundamentals and technical indicators to recommend trades for his subscribers.
Pete doesn't view the overall market as only a buy or a sell. He finds many more trading opportunities by watching to see which sectors investors are rotating into next.
As we talked, he noted that overall, the Magnificent Seven tech giants were recently underperforming the other "S&P 493." That's great news for investors interested in choosing their own stocks. A higher number of outperforming stocks means more trading opportunities.
(Since the March 30 bottom, most of the Mag Seven – except for Apple and Tesla – have outpaced the overall S&P 500.)
Two of Pete's favorite alternatives to a Mag Seven stock are the State Street SPDR S&P Oil & Gas Equipment & Services Fund (XES) and the State Street SPDR S&P Metals and Mining Fund (XME).
To recommend individual stock trades to his subscribers, Pete starts with well-performing index funds like those and uses his analytical skills to pick the best stocks from those sectors. For example, in XME, we both agreed that steelmaker Nucor (NUE) is a well-run, high-quality business.
I've known about that company since I covered it nearly 20 years ago. Back then, I read Richard Preston's riveting tale of the company's founding, American Steel: Hot Metal Men and the Resurrection of the Rust Belt.
When Nucor built its first electric arc furnace in 1969, using massive amounts of electricity to melt down old Cadillacs into molten steel was a new and risky technology. Today, it's old hat, and Nucor is the largest steel producer in America. If you're looking for high-quality bets in the U.S. steel industry, Nucor is your first stop.
Talking about great businesses is one of the two things that happen whenever I interview someone from Stansberry Research or one of its affiliates. The conversation wends its way through the guest's unique experiences, perspectives, skills, and current viewpoints, and sooner or later ends up identifying two overriding truths...
- When you're buying stocks, focus first on the highest-quality companies in a given industry. Don't mess with speculative junk unless you understand the situation very well and know what you're getting into.
- Risk management is key. That one topic has come up with virtually every single investor and trader I've spoken with on the Investor Hour since I took over as host in 2018. In other words, hundreds of expert investors – from the twitchiest short-term traders to folks looking for stocks they hope never to sell – have all agreed that recognizing, understanding, and managing risk is an investor's most important job.
The topic of risk management brings me back to the Iran war...
Despite the White House's suggestions otherwise, the past 48 days have highlighted a source of risk (and opportunity) that shows no signs of ending.
It's that the world has been stone-cold in love with tech stocks for most of the past two decades.
The advent of AI has taught us that even great software companies can suffer when the technology changes... And the Iran war has shown that raw materials like the ones that pass through the Strait of Hormuz are a lot harder to make than software code.
That's really important, given that America has been more interested in making software than things like oil refineries for decades now. And it's really hard – if not outright impossible – to build new ones. As Chevron CEO Mike Wirth told Bloomberg in June 2022...
My personal view is there will never be another new refinery built in the United States. You're looking at committing capital 10 years out, that will need decades to offer a return for shareholders, in a policy environment where governments around the world are saying, 'We don't want these products.'
Think about who's doing the talking here. Wirth runs a major U.S. oil company that has been operating in Venezuela for more than 100 years. It was the only one to hang on after ExxonMobil and ConocoPhillips left in 2007. He has forgotten more about navigating a tough political environment than most folks will ever know. And he says building a refinery in the U.S. is a hopeless nonstarter.
It's not a great thing for the U.S. But as I've pointed out before, it's an important underlying fundamental issue that can make refinery operators and other energy stocks extremely attractive at times (like now).
That brings me to the other great interview we did recently, with Tracy Shuchart of the Renegade Resources newsletter...
Tracy's research into the commodity industry is absolutely top-notch. I credit her with inspiring me to go down the diesel/refinery rabbit hole I've been living in since December.
Since then, I've recommended four energy stocks in The Ferris Report (including two refinery companies) and one refinery-related stock in Extreme Value. I'll recommend another refinery-related stock in The Ferris Report next week. (If you want to go down the rabbit hole with me and don't already subscribe to The Ferris Report, check out my new presentation at NextEnergyShock2026.com.)
Tracy likes commodity and hard-asset stocks generally today. And she agreed with me that global markets have become financialized... overflowing with gobs of printed money, stocks, bonds, and cryptos, all sloshing around competing for dollars with essential commodities.
You can print all you want of those financial assets. But you can't print crude oil, gasoline, diesel fuel, jet fuel, sulfur, ammonia, cement, steel... and a host of other essential ingredients that make up the basic building blocks of our modern world. And there are no real substitutes for most of those materials.
One of Tracy's favorite stocks is an obscure company that I instantly recognized... Longtime Stansberry Research subscribers might remember it, too: Argentina-based farming and land company Cresud (CRESY).
In her recent research, she calls Cresud "farmland at a single-digit P/E." In other words, it's an essential commodity at an attractive price-to-earnings valuation.
The bottom line on all this is that, just 48 days into the war, the stock market might look like it's getting back to normal. But as my talks with Pete and Tracy demonstrate, it's anything but.
America is losing its capacity to produce essential commodities...
The political environment of the last few decades has created this scarcity. And the war in Iran has ratcheted up uncertainty over the supply of those materials.
That doesn't go away just because the S&P 500 is making new highs.
As I've pointed out before, the war in Iran didn't create the opportunity. Decades of crimped supply did that. The war has merely pulled the opportunity off the back pages and put it into the headlines.
Now, folks know me as a contrarian. So normally, I'd be skeptical of whatever is in the headlines. But I've done enough research on various commodities, especially energy-related ones, to believe that this trade has serious legs under it.
There's a reason that a technicals-based trader like Pete has arrived where fundamentals-based investors like Tracy and I are now. I believe it's that the market is starting to figure out what I've been telling you in this and other recent Digests...
Whether the war winds down soon or not, there's ample reason to believe the world's growing energy needs will keep commodity-related stocks performing well over the next few years ‒ and perhaps even beyond.
And as the market fully grasps this, energy's nascent bull market will have even more room to run.
New 52-week highs (as of 4/16/26): Advanced Micro Devices (AMD), Alpha Architect 1-3 Month Box Fund (BOXX), BP (BP), CBOE Global Markets (CBOE), Deluxe (DLX), FirstCash (FCFS), iShares Convertible Bond Fund (ICVT), Intel (INTC), KraneShares Bosera MSCI China A 50 Connect Index Fund (KBA), and State Street SPDR S&P Semiconductor Fund (XSD).
In today's mailbag, feedback on yesterday's Digest, which discussed oil and gas prices... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Corey McLaughlin mentioned high gas prices again today in Stansberry Digest. I'm not understanding the problem.
"I haven't seen gas priced above $4 a gallon this year. Let's remember that crude oil was $139.96 per barrel in June 2008. Let's remember the purchasing power of a dollar in 2008." – Subscriber J.K.G.
Corey McLaughlin comment: Gas prices may be lower depending on where you live, but the average U.S. gas price was just above $4 per gallon as of yesterday... and diesel has been above $5.50 per gallon, on average.
Granted, prices may go down depending on what happens next with the war in Iran. Today was a good start with the Strait of Hormuz "reopening" again. Oil futures dropped by more than 10% after the news this morning.
"I work for a national residential/commercial building materials distribution center. All of our suppliers/manufacturers have raised prices between 6-12% across the board just in the last three weeks.
They also have all implemented additional fuel surcharges on freight that add further to the cost. My concern is that this is going to ripple through the economy and spike inflation. We all know once prices are raised they are not going to be lowered..." – Subscriber B.W.D.
"Corey, I think back to 2008-2010. Diesel hit $5/ gallon; gas hit $4/gallon. I heard and knew a few folks who moved out of their homes before dropping their keys at mortgage offices. In those days I served industrial customers (paper/pulp; automotive; plastics mfr; etc). I recall that the hourly paid working men and women hurt most. They would tell of having to decide about paying the mortgage, utilities, credit card or pay for fuel. Car dealerships were ghost towns. I remember also being able to count cars traveling through Atlanta on I-85; two or three cars at a time! I still hold that high energy prices started the 'economic unraveling' back then.
"Now retired, I am still in contact, daily, with the hourly wage earners. They are once again hurting!
"One final memory: while visiting three different suppliers to a Korean auto maker, I noticed huge inventories of completed parts piling up all over the factories. From the floor of my third plant visit, I instructed my then broker to convert all my accounts to cash. The following week DJIA [began its drop] from about 14,000 to around 7,000. Maybe this time will be different." – Subscriber Mike B.
Good investing,
Dan Ferris
Medford, Oregon
April 17, 2026