Rising Oil, Rising Markets – Now What? | Steve Henderly, CFA
Printer Friendly PDF: May 2026 Commentary
It’s no secret that high oil prices are generally a drag on the economy and stock market. We witnessed the negative relationship in March as oil spiked and stocks fell with the onset and uncertainty of the Iran war and closure of the Strait of Hormuz. But… scratch that, April Fools! Beginning in April, oil prices didn’t matter. Yes, an apparent ceasefire between the U.S. and Iran was welcome news and provides hope the worst of the conflict is over. But shipping through the Strait remains blocked and oil/gasoline prices ended April near their highest levels in four years. Oil prices up, stocks…up?!? As we move into a new month, does the backdrop suggest one should “sell in May and go away”?
Stocks raced back to pre-war levels and beyond in April with the S&P 500 establishing 8 new record highs during the month. In fact, the S&P 500 experienced its best month since the 2020 covid pandemic rebound with a gain of +10.5%. Wow!