Stocks are pushing back toward highs again, and on the surface, the market looks stable.
But beneath that surface, a very different message is starting to emerge…and it’s coming from a place investors can’t afford to ignore: OIL.
The Message Most Investors Are Missing
Over the last 48 hours, tensions in the Middle East have escalated again.
The U.S. seizure of an Iranian cargo ship, followed by renewed threats from Iran, has brought the stability of the Strait of Hormuz back into focus.
That’s significant.
Roughly 20% of the world’s oil flows through that single chokepoint, meaning any disruption has ripple effects across inflation, supply chains, and ultimately corporate earnings.
We’ve already seen the initial reaction. Oil prices moved sharply higher.
Equities, however, have remained relatively calm.
That divergence is worth paying attention to. Historically, when oil spikes due to geopolitical risk, stocks tend to follow - just not always immediately. One side of that equation usually adjusts.
Where Opportunity Starts to Show Up
This is where the market becomes more interesting.
Periods like this - where headlines create uncertainty but prices haven’t fully adjusted - tend to reveal early signs of leadership. We’re already seeing strength in areas that benefit from this environment, including energy, defense, and select industrial and infrastructure names.
These moves aren’t happening by accident. They’re often the first indication of where capital is beginning to rotate.
The biggest risk for investors at the moment is assuming that the recent volatility has already passed.
The market reacted positively to the ceasefire headlines, but the underlying situation remains fluid. As tensions begin to rise again, complacency is starting to creep back into positioning.
That’s often when opportunities - and risks - are mispriced.
The Real Mistake Right Now
This is exactly the type of environment where a more selective approach becomes valuable.
Markets driven purely by momentum tend to lift most assets together. Markets like this - where conflicting signals are emerging - create more dispersion.
That’s where individual opportunities begin to stand out.
It’s also why I recently launched the Special Situations Portfolio.
It’s focused on identifying those opportunities before they become obvious to the broader market.
The Bottom Line
Oil is signaling rising risk, while equities have yet to fully reflect it.
That kind of disconnect doesn’t typically persist. When it resolves, the adjustment can happen quickly.
The key is recognizing it early- and positioning accordingly.
One Chart That Matters
Marvell Technology $MRVL ( ▲ 4.57% ), which is pushing to a new all-time high.
That’s notable not just on its own, but in the context of a broader trend.
Semiconductors have been among the strongest performers in 2026, driven by continued demand tied to AI infrastructure.
What stands out is that this strength is persisting despite rising geopolitical tension and macro uncertainty. When a sector continues to lead under those conditions, it usually reflects sustained institutional demand rather than short-term momentum.
Here’s to the future,
Matt McCall
Founder, NXT Wave Research
