Oil Wins Every Argument and SpaceX Is About to Go Public

On Tuesday, stocks surged on hopes of a ceasefire. Iran rejected the terms the same afternoon. On Wednesday, markets climbed again after Trump sent Tehran a 15-point peace proposal. Iran rejected that too. On Thursday morning, Trump posted on Truth Social warning Iran to "get serious soon, before it is too late," and added that once a point of no return was reached, it "won't be pretty." Brent crude jumped 5% to above $107 per barrel. The S&P 500 fell 0.8%. The Nasdaq shed 1.1%. The Dow dropped more than 200 points.

Every positive signal has been quickly undone. Every escalation lands with immediate weight. This is what a market being held hostage by a single geopolitical variable looks like in real time, and there is no fundamental data point, earnings beat, or Fed signal that can reliably override it while the Strait of Hormuz remains effectively closed.

The S&P 500 is currently sitting around 6,535, down roughly 5% over the past 30 days but still up approximately 15% on a year-over-year basis. That year-over-year figure is worth holding onto. Despite everything, the index has not given back the structural gains of the past year. It is being pressured, not destroyed. The VIX is above 26, which reflects elevated but not extreme fear by historical standards. Treasury yields are climbing as energy prices push inflation expectations higher, reducing the market's confidence in near-term rate cuts from the Federal Reserve.

Oil is the number that explains everything else right now. West Texas Intermediate is above $94 per barrel. Brent is trading above $107. Goldman Sachs is forecasting Brent to average $110 through April, with Citi analysts modeling a scenario in which prices reach $200 if the disruption extends through June. That is not the base case, but the fact that it is being modeled by major banks at all tells you how serious the tail risk has become.

The OECD revised its US inflation forecast for 2026 upward to 4.2%, a sharp step up from its prior projection of 2.8% and significantly above the 2.7% estimate the Fed itself published when it last updated its forecasts. That gap between the OECD's projection and the Fed's own estimate is a meaningful signal. Either the Fed will need to revise upward, or oil prices will need to come down substantially, or both. The market is pricing in the worst of the available options.

For the Federal Reserve, the bind is becoming more acute by the week. A tight labor market, with initial jobless claims coming in at 210,000, just below the forecasted 211,000, and continuing claims at their lowest level since May 2024, gives the Fed no obvious justification to cut rates on growth grounds. Add an oil shock pushing inflation toward 4%, and the path to easing narrows to a degree that would have been unthinkable at the start of the year.

The market is sorting itself in predictable ways, and those patterns are worth paying attention to for anyone thinking about positioning.

Energy is the obvious winner. Exxon, Chevron, and the broader oil sector have been among the few consistent performers since the conflict began. The logic is straightforward: higher oil prices improve the profitability of upstream producers regardless of the geopolitical cause. Defense names including Northrop Grumman and Lockheed Martin have also held up well, with the conflict driving both near-term demand for munitions and longer-term conversations about defense spending at the government level.

On the other side, rate-sensitive sectors are under pressure from rising yields. High-growth technology stocks that trade on discounted future cash flows get hit twice when yields rise, once from the discount rate effect and once from the risk-off sentiment that typically accompanies oil spikes. Tesla, Microsoft, Amazon, and Meta were all lower in Thursday's session. Memory chip stocks including Micron and related names have added another headwind on top of geopolitics, after Google unveiled a new AI compression algorithm that raised questions about near-term demand for high-performance memory. Alphabet and Meta are both under additional pressure after a California jury found both companies liable in a social media harm case involving a minor.

Gold, which surged above $5,400 an ounce in the early weeks of the conflict, has pulled back to around $4,437 this week, falling over $100 in a single session on Thursday as some traders rotated out of the safe-haven position. That reversal is worth watching. Gold giving back ground while oil continues to rise is an unusual divergence, and it may reflect profit-taking after an extended rally rather than any fundamental change in the macro picture.

Amid the daily war-driven volatility, the markets story with the longest tail is one that broke this week and has received less attention than it deserves.

Reports emerged on Tuesday that SpaceX is preparing to file confidential IPO paperwork with the SEC as early as this week, targeting a public listing in June 2026 at a valuation between $1.5 trillion and $1.75 trillion. The offering could raise more than $75 billion, which would shatter Saudi Aramco's $29.4 billion record set in 2019 to become the largest IPO in history.

The business behind that number is substantial. SpaceX reported revenues of approximately $16 billion in 2025, driven primarily by the Starlink satellite internet service, which reached 9.2 million active subscribers by the end of the year. Revenue is projected to accelerate toward $22 billion to $24 billion in 2026. The company has been cash-flow positive for years, operates the world's most active commercial launch vehicle, and following its acquisition of Elon Musk's xAI in February, now carries a combined AI and aerospace narrative into its public debut.

That narrative is genuinely powerful in the current market environment. Space sector stocks surged on Tuesday when the IPO reports broke, as investors scrambled to position for exposure ahead of a listing. The story combines satellite internet dominance, AI infrastructure ambitions including Musk's vision for orbital data centers, defense relevance through government launch contracts, and the Starship program, which remains the most ambitious rocket development effort in commercial history.

The valuation math deserves scrutiny, however. At $1.5 trillion, SpaceX would be trading at somewhere between 60 and 70 times its projected 2026 revenue. That is a multiple that leaves no room for execution risk, no tolerance for Starlink growth slowing, and no margin for the kind of timeline slippage that has historically accompanied Musk's most ambitious infrastructure announcements. Historical data on mega-IPOs is not encouraging for long-term holders. The pattern across the largest listings on record is that a first-day pop is frequently followed by significant multiple compression over the subsequent two to three years as the company has to prove out the revenue assumptions embedded in the initial price.

That said, the near-term narrative is clear. If SpaceX files its prospectus this week and moves toward a June listing, it will become the dominant story in markets for the next 90 days. It will absorb enormous amounts of institutional attention and capital. It will pull conversations about AI infrastructure, space, defense, and technology investment into one single ticker. And in a market that is currently being driven almost entirely by oil and geopolitical uncertainty, a story of that magnitude and ambition arriving on the calendar is exactly the kind of catalyst that can shift sentiment.

The war dominates every session right now. The SpaceX IPO is the counter-narrative sitting just off the front page, building momentum while nobody is watching the oil chart.

Both of those stories are going to define this market for the next quarter. The first is unpredictable by its nature. The second you can put a date on.