EconVerse

Stacker_Stocks

The DXY rises to recent highs, reflecting global defensive flows amid increased geopolitical risk and soaring commodity prices.

If the oil shock persists, the combination of higher inflation and risk aversion is likely to continue supporting the dollar in the short term.

![](https://m.stacker.news/133606)

Middle East escalation revives classic playbook: oil up, dollar safe haven.

History shows that geopolitical shocks that raise oil prices tend to put pressure on the stock market, but rarely cause prolonged collapses.

In episodes like the Gulf War, Iraq, or Libya, the average drawdown of the S&P 500 ranged between ~2% and ~19%, often concentrated at the beginning of the crisis.

In other words, although oil prices soar and volatility increases, the structural impact on stock markets is usually more limited than imagined.

![](https://m.stacker.news/133601)

Wars in the Middle East don't always cause stock market crashes.

The most important place in the global economy right now may be a strait only 39 km wide.

The Strait of Hormuz. Approximately:

• 20 million barrels of oil per day
• ~20% of global supply
• a large part of the world's LNG

If this route stops, the impact is immediate.

![](https://m.stacker.news/133264)



Countries that directly depend on this route to export oil:

• Saudi Arabia
• United Arab Emirates
• Kuwait
• Iraq
• Qatar

There is no alternative infrastructure capable of quickly replacing this flow.

![](https://m.stacker.news/133265)



Iran knows it cannot win a conventional war against the US. The numbers explain why. The US spends $877 billion a year on defense.

That's more than the next 10 countries combined.

So the Iranian strategy is different.

![](https://m.stacker.news/133266)



Asymmetric warfare.

Instead of winning militarily, the objective is to increase the economic cost of war.

Historically, this includes:

• attacks on oil tankers
• naval mines
• attacks on refineries
• regional proxies. Small actions can generate global shocks.

![](https://m.stacker.news/133268)



Real-life example.

The attack on the Saudi Abqaiq refineries in 2019.

Result:

• 5% of global oil production was taken off the market in hours.

A single event changed the global market.

![](https://m.stacker.news/133269)




The economic impact comes primarily through inflation. Studies by the Federal Reserve show that:

👉 each $10 increase in oil adds approximately 0.2% to inflation.

Approximate example:
$80 → inflation ~2.9%
$100 → ~3.6%
$130 → ~3.9%
$150 → ~4.3%


![](https://m.stacker.news/133270)



Another sign of stress has already appeared.

The cost of transporting oil on supertankers (VLCCs) has skyrocketed.

At times, freight costs reached almost 20% of the value of the oil itself.

![](https://m.stacker.news/133271)



There is also an indirect geopolitical effect: China.

• 87% of Iran's exported oil goes to China
• 55% of Venezuela's oil also goes to China

These two countries supply approximately 2.5–3 million barrels/day to Chinese refineries.

![](https://m.stacker.news/133272)



This oil is usually sold at a discount.

Frequently $7–11 below Brent.

In other words:

cheaper energy → industrial advantage for China.

Disruptions in these flows force Beijing to buy more expensive oil on the global market.



Another curious phenomenon has recently emerged.

War has begun to be bet on in prediction markets.

On Polymarket, traders are betting on scenarios such as:

• duration of the war
• closure of Hormuz
• deployment of American troops
Some bets suggest conflict until September.




There are also contracts betting that the US may send troops to Iran.

So far, Washington denies any plan for a ground invasion.

But the markets are already pricing in the risk.

![](https://m.stacker.news/133273)



American domestic politics also come into play.

Trump's approval rating is currently in the negative double digits. Some recent polls:

The Economist
• 38% approval
• 58% disapproval



And most Americans do not support the war.

Some polls indicate:

• 43% disapprove of attacks on Iran
• 27% approve

When the question involves sending troops, opposition reaches nearly 60%.




The real political problem today is something else entirely:

the cost of living.

The so-called affordability crisis dominates the polls.

Historically high gasoline prices reduce presidential approval ratings.

With midterm elections in October, expensive energy becomes a political risk.


![](https://m.stacker.news/133274)




Interestingly, markets typically absorb wars quickly.

Average return of the S&P 500 after conflicts:

1 week → ~0%
1 month → +1.5%
3 months → +2.8%
6 months → +5.9%
12 months → +8.4%


![](https://m.stacker.news/133275)


In other words:

Wars rarely bring down markets for very long.

The real risk is something else.

Energy.

If Hormuz remains open → the market continues.

If it closes → the world quickly discovers what $200 oil means.

Some analysts now discuss a once-absurd scenario: oil at $200 a barrel.

Goldman Sachs believes the Strait of Hormuz will begin to normalize in 5 days.

Since the beginning of the year, virtually all of Brent's rise has come from the geopolitical premium.

The contribution from demand has been relatively stable, while supply factors have even exerted negative pressure at times.

That's a cool model…


![](https://m.stacker.news/132959)

Oil has once again become a matter of geopolitics.

In theory, this would help the stock markets. But context matters.

If the interest rate cut comes from a repricing of growth, and not from inflationary relief, the signal is different: the market is beginning to price in a slowdown.

With conflict in the Middle East, soaring oil prices, and a strong dollar, the risk is clear: more inflation in the short term and less growth ahead.


![](https://m.stacker.news/132731)

The yield on the 10-year Treasury bond has plummeted in recent weeks.

Iran produces approximately 3.3 million barrels/day, just over 3% of global supply. In isolation, the shock is manageable.

The critical point is the Strait of Hormuz: about 20% of global oil transits through there.

A prolonged disruption could push Brent above US$100.

The market is likely to become nervous.


![](https://m.stacker.news/132729)

A prolonged disruption could push Brent above US$100

Consensus projects $667 billion in capital expenditure from hyperscalers in 2026, a 62% year-over-year increase, following a 73% increase in 2025.

Amazon, Microsoft, Alphabet, Meta, and Oracle continue to accelerate infrastructure as if the cycle has no brakes.

The question is… will the return on this capital justify this pace?

![](https://m.stacker.news/132234)

US$667 billion in AI capital expenditure

In Japan and Europe, the rally has been primarily driven by multiple expansion (P/E ratio).

In emerging markets, the driver is earnings revision (EPS), not re-rating.

China, however, remains pressured by multiple compression.

Question: are we buying real growth… or just paying more for the same earnings?

Stay tuned for the next chapters…

![](https://m.stacker.news/132233)

Who will be driving the stock market in 2026?

Bloomberg Terminal: $25,000 per year

Perplexity Computer: built a complete AI-powered financial terminal in minutes

The future is here. And it's insane.

![](https://m.stacker.news/131999)

The monopoly of financial terminals is threatened.

China's gold reserves have grown in recent years as global investors diversify away from dollar-denominated assets.

China's official gold holdings have increased from approximately $100 billion in 2020 to nearly $400 billion by the end of 2025.

This movement reflects a deliberate strategy of de-dollarization and reserve diversification.

China is reducing its exposure to US Treasuries while aggressively and systematically increasing its gold holdings.

![](https://m.stacker.news/131991)

China swaps Treasuries for gold and nearly quadruples reserves.

(upside of 47.7%).

Investors are looking beyond Q4 results to the GTC 2026 conference in March to discuss the next-generation roadmap using Groq chips.

The bank models Jan-Q sales of $67B above the $65.6B expected by Street, with Apr-Q guidance of $73B vs $71.6B.

They expect a strong ramp-up in the B300, driving a 34% H/H acceleration in 2H26 sales versus 27% in 1H26.

Aggressive…

![](https://m.stacker.news/131989)

Citi maintains its Buy rating on Nvidia with a price target of $270

It closed at $66,305 on February 18th, but plummeted to $64,901 (-2.0%) in subsequent sessions.

The chart shows increasing volatility after a period of consolidation between $67-68k.

The recent drop broke the technical support and marks a return to the level seen at the beginning of February.

![](https://m.stacker.news/131541)

Bitcoin falls amid renewed tariff uncertainty.

$EWZ has risen almost 30% since September, but the rally shows classic spot-up, vol-up instability, pushing the Bubble Risk Indicator to extreme levels (~0.8) according to the BofA derivatives team.

3-month implied volatility has soared to 32-34%, while realized volatility has remained at 28-29%.

The spread between implied and realized volatility is widening, signaling that the market is pricing in high risk ahead.

For those who want to participate without paying dearly for volatility, a calendar call spread seems attractive: long Mar-26 calls vs short Jul-26 further OTM calls.

![](https://m.stacker.news/131209)

$EWZ has risen almost 30% since September.

Electricity +56%, utility gas +64%, home insurance +41%. Overall inflation has receded, but these costs continue to rise.

Home insurance has accelerated mainly since 2024, going from zero to +41%.

Electricity peaked at +64% in 2022, receded, but has risen again to +56%.

Even with overall inflation cooling, essential housing costs remain under pressure.

American families face increasing strain on household budgets.

This type of persistent inflation in essential items erodes purchasing power more than the headline CPI suggests.

![](https://m.stacker.news/131038)

Housing costs in the US have skyrocketed since January 2020.

Brent crude oil rose again as the probability, measured in betting markets, of a US attack on Iran increased.

When the chance of escalation rises, the price of a barrel responds almost in real time.

The point: if tensions ease, this premium could evaporate quickly.

If it escalates, the market will return to discussing supply.

![](https://m.stacker.news/131034)

Oil already reflects geopolitical risk.

The S&P 500 ex-Mag 7 & Tech has fallen behind.

S&P 500 margins have risen from approximately 6% in 2002 to approximately 10% today, but tech (ex-Mag 7) has surged from approximately 6% to approximately 14%.

The difference has widened dramatically since 2020.

Tech has maintained consistent expansion for two decades and has recently accelerated.

While the rest of the market faces cost pressures, tech continues to gain operational efficiency.

AI may be amplifying this dynamic: tech companies are scaling revenue with decreasing marginal cost, while traditional sectors face input inflation.

![](https://m.stacker.news/130838)

Margin expansion has been the strongest trend in tech.

According to the latest BofA survey, 35% of global managers say that companies are "overinvesting"... the highest level in at least 20 years.

Furthermore, 30% see AI capital expenditure as a potential trigger for a credit crisis, and 25% already see an "AI bubble" as the main tail risk.

So? Signs of a bubble or prudent retreat?

![](https://m.stacker.news/130832)

Big Tech's capital expenditure has become a negative consensus.

Core inflation fell to 2.5%, in line with expectations of 2.5%.

Core inflation is now at its lowest level since March 2021.

Interest rate cuts are back on the agenda.

![](https://m.stacker.news/130323)

US CPI inflation fell to 2.4% in January, below the 2.5% forecast.

Automotive demand for NdPr could jump 83% to 38.7kt between 2024-30, according to Bloomberg.

Permanent magnet motors dominate EVs due to higher efficiency.

Integrating ~2kg of rare earths improves efficiency by 2-5%, allowing for smaller and cheaper batteries – relevant since the battery represents ~50% of the vehicle cost.

Global EV sales continue to grow, with China leading but other markets gaining market share.

The rare earth thesis is: growing structural demand with few suppliers outside of China.

![](https://m.stacker.news/130320)

![](https://m.stacker.news/130321)

EVs are the biggest source of demand growth for rare earths.

Walmart currently has a much higher P/E ratio than Amazon, even though Amazon's revenue has grown (and surpassed) Walmart's decline much more.

![](https://m.stacker.news/130186)

![](https://m.stacker.news/130187)