Everything has a reason to go up now that oil’s down*
*Exceptions include energy and chemicals stocks.
All’s well because oil fell.
US stocks are off to the races on Wednesday morning after the US and Iran agreed to a two-week ceasefire, during which time oil flows through the Strait of Hormuz are expected to pick up as the two sides look to negotiate a more enduring peace.
The winners in premarket trading include:
Stocks where oil is a high input cost, like cruises and airlines: American Airlines, United Airlines, Southwest Airlines, Carnival, and Norwegian Cruise Line.
Delta’s better-than-expected Q1 results are also helping that stock.
The megacaps: all of the Magnificent 7 are up at least 2% in premarket trading as of 9:05 a.m. ET, with Meta and Tesla leading the way higher.
The fringes of the AI compute and power trade: names like Applied Digital (which reports earnings today), other data center stocks like Cipher Digital, IREN, CoreWeave, and Nebius, zero-revenues nuclear company Oklo, and Bloom Energy.
The enduring sources of AI momentum: memory and optics, like Micron, Coherent, Seagate Technology Holdings, Western Digital, Corning, Lumentum, Ciena Corp., Sandisk, and Applied Optoelectronics.
Speculative stocks like the quantum computing companies (D-Wave Quantum, Rigetti Computing, Infleqtion, and IonQ) and others like Plug Power, Rocket Lab, and SoundHound AI.
And Robinhood Markets, which benefits from higher trading activity and rising markets, is also up massively.
(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)
In short, everything is up except oil and chemicals stocks, and if West Texas Intermediate front-month crude futures closed here, it would be their biggest one-day drop since April 2020 (as of 8:42 a.m.).
Our losers are thus the likes of Exxon, Dow, Inc., CF Industries, and APA Corporation, which had been benefiting from the rise in energy prices.
