US stocks dropped on Tuesday as the conflict between Israel and Iran continued without a quick resolution. President Trump left the G7 early to deal with the issue, while the US military increased support for Israel, despite falling global stock markets and rising tensions. WTI Oil prices climbed more than 2.6%, reaching $73.56. This rise has raised concerns at Apollo Global Management about possible stagflation. Higher oil prices could affect US inflation and GDP, with projections suggesting a 0.4% rise in inflation and a 0.4% drop in GDP if prices stay high.

Chevron’s Market Performance

Chevron saw its stock gain 1.8% on Tuesday due to climbing oil prices. The company purchased lithium-rich land in Texas and Arkansas, and announced possible layoffs under the Worker Adjustment & Retraining Notification Act. Chevron stock reached $148.00, close to its 200-day Simple Moving Average at $149.59, its highest since early April. If oil prices keep rising, Chevron could aim for a $160 resistance level, potentially hitting $168.00 if the momentum continues. This recent market dip, caused by the ongoing tensions between Israel and Iran, shows how geopolitical issues affect asset pricing, especially in sectors like oil and defense. As the US government shifts focus from diplomatic talks to strengthening its military presence, cautious sentiment is emerging in equity markets. We’ve seen broad selling in US indices, which may continue if the situation remains unpredictable or escalates.

Energy Markets and Geopolitical Shocks

Energy markets are reacting as expected during geopolitical conflicts, with WTI crude closing more than 2.6% higher. A price of $73.56 per barrel indicates that market players are starting to consider a potential long-term supply shock, especially if production or transport in the area faces direct threats. Institutional investors like Apollo are voicing concerns about the broader economic effects of these oil price changes—specifically, the possibility that inflation may not just remain stubborn but might speed up, hindering domestic growth. The suggested impact of a 0.4% rise in inflation and a 0.4% drop in GDP if oil prices stay high is significant. While these numbers aren’t disastrous by themselves, any continued rise in energy costs could complicate decisions for the Federal Reserve. Recently, policymakers moved to a more data-driven approach, making it tougher for them to ease tightening measures if overall consumer prices start to rise again. Chevron’s stock gained 1.8% in this context, reflecting strong investor interest in firms benefiting from rising oil prices. The company is not only capitalizing on higher oil prices but is also diversifying. Its recent investment in lithium land in Arkansas and Texas expands its resource base during a time when electric vehicle supply chains are changing. However, the announcement of potential layoffs serves as a reminder that financial decisions can come with costs, which may require adjusting forecasts for short-term employment expenses. Looking at technical trends, Chevron’s ability to exceed $148.00 and approach its 200-day simple moving average sets the stage for an important decision point. If WTI keeps trending upward and surpasses $75 in the coming days, the stock could soon target $160. If momentum traders jump back in, $168 is possible, but achieving this would require both energy prices and overall market sentiment to align—an outcome that remains uncertain amid various economic factors. At this time, directional bets should be made cautiously, as short-term options are increasingly subject to fluctuations and associated risks. Price movement may seem justified on its own, but without sufficient volume and structural confirmation in energy inputs, these trades may not hold. We’re closely monitoring correlations between oil prices, spreads on high-yield bonds, and VIX levels to anticipate any shifts in how traders are responding to current geopolitical events. Keep an eye on short gamma positions near current oil resistance; the crowded nature of these trades increases the likelihood of sharp reversals. This is not a quiet moment—it’s more like a wedge pattern forming, both in volatility compression and market positioning. Create your live VT Markets account and start trading now.

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