⚡ Strait talk

After three straight years of dismal performance, energy stocks have emerged as the biggest market winners so far in 2026, posting the biggest gains of the 11 sectors that constitute the S&P 500. 

• This group of large-cap oil and gas producers, refiners, fuel retailers, and field services companies has jumped more than 20% since American special forces captured and extradited Venezuelan President Nicolás Maduro and launched a clampdown on sanctioned oil vessels seeking to transport Venezuelan crude. 

• Energy stocks coasted to the top of the stock market charts thanks to new Iran-related risks, but the gains came before the rockets, drones, and F-35s actually started flying.

• But going forward, further surges seem far from guaranteed. That’s partly because in a war, the enemy gets a vote.

Iran has responded with strikes on energy infrastructure throughout the region and the partial closure of the Strait of Hormuz — a crucial shipping choke point through which 20% of global oil and gas passes. The longer the partial closure lasts, experts say, the worse it will be for the world economy, and that includes oil and gas companies. 

• On Monday, Iran hit Saudi Arabia’s largest refinery, Ras Tanura, temporarily halting production. 

• Qatar Energy halted production of liquefied natural gas at its Ras Laffan facility — the world’s largest LNG plant — after an attack. 

• Iranian strikes have also reached a refinery in Kuwait, shuttered production in Iraqi Kurdistan, and closed down several Israeli gas fields, according to Reuters. 

The disruptions help explain the evolving reaction of markets to the situation. After rising on Monday, US energy stocks had a mixed reaction to the spreading war on Tuesday. 

The Takeaway

Commodities analysts are carefully watching whether any element of Iranian leadership emerges as a potential partner to work with the US, essentially reprising the role of Venezuela’s Delcy Rodríguez, who has been a relatively pliant acting president since the American military captured and transported her predecessor, Maduro, to face trial in the US. That sort of scenario is harder to imagine in Iran. Regime antipathy to the US has been central to the Iranian government since the founding of the Islamic Republic in the late 1970s. But it’s not impossible.

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During his opening statement on Tuesday, David Dahlquist, attorney for the US Justice Department, told jurors: “The concert ticket industry is broken, in fact the concert industry itself is broken. It is controlled by a monopolist. It is controlled by Live Nation.”

• Live Nation posted record-breaking total revenues of $25.2 billion in 2025, up 9% from the year before, with its biggest quarter landing, as it often does, in the summer months of Q3. 

• The company’s concert division posted around $20.9 billion in revenue across 2025 (equivalent to 83% of its year-end total) while its ticketing division accounted for just $3 billion (~12%).

• Though concerts have long been the beating heart for revenue in the Live Nation business, its ticketing system is actually the profit center, with a 37% adjusted operating profit margin, netting $1.1 billion over the period — compared with a much smaller 3% margin for concerts (~$687 million). 

• Even with concert ticket prices much higher than before — a 2025 survey from Pollstar found that the average US ticket price for the top 100 tours in the US was $135.92, up 41% from 2019 — more people than ever are going to live events.

The DOJ first filed the antitrust lawsuit back in 2024, accusing Live Nation — which merged with ticket sales and distribution company Ticketmaster in 2010 — of illegally monopolizing the live music market. 

The Takeaway

By contrast, Live Nation’s opening remarks for what could be the most consequential legal battle the modern music industry has seen took a more jovial tone. The Verge reported that the entertainment giant’s counsel pointed mostly to the good times, with slides of popular artists’ concerts underscoring its argument that the company is “all about bringing joy to people’s lives and doing it lawfully.”

Go Deeper: How LiveNation quietly takes your money at every possible opportunity

The intense drubbing in South Korean stocks, with the benchmark Korean index falling nearly 20% in its first two trading days of the week, represented a serious threat to the hottest AI trade: memory stocks like Micron, Sandisk, Western Digital, and Seagate Technology Holdings. South Korea’s market is dominated by two high-bandwidth memory giants: SK Hynix and Samsung. But on Wednesday, US investors rushed to buy the dip. And then Sherwood News Markets Editor Luke Kawa noticed something even more interesting.

Mind the gap

• 🏛️ Rates: A war in the Middle East, and the resultant upward pressure on oil prices, has caused traders to reverse bets that the Federal Reserve will cut interest rates in the first half of this year. The prediction market-implied odds* of a rate cut in June are less than 38%. Last week, the odds of a rate cut in June were around 60%.

• 📊 Elections: The Texas Senate Republican primary is headed for a runoff between incumbent Sen. John Cornyn and Attorney General Ken Paxton. With a potential endorsement from President Trump teased, Cornyn’s seen as having the edge, with prediction markets favoring him by 89%.

*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.

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