Market Rebound
Wall Street Rises as Oil Prices Drop, Airlines See Gains in Market Rebound
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Wall Street is staging a modest rebound Tuesday after a brutal Monday sell-off, with S&P 500 futures up 0.4% and Dow futures gaining less than 0.2%, according to Associated Press. The bounce comes as Brent crude oil pulled back to $92.83 per barrel — down $1.42 on the day — after briefly spiking above $98 overnight.
The sell-off on June 8 sent the S&P 500 down 2.6%, its worst single day since October, as war-driven energy costs rattled investors. Tuesday's early signals suggest buyers are returning, led by a 0.8% jump in Nasdaq futures on tech stocks like Nvidia and Micron, Associated Press reports.
Oil Surges Past $98 Then Quickly Retreats
Brent crude briefly touched $98 per barrel overnight before falling back. U.S. benchmark crude (WTI) sat at $89.62 Tuesday morning, according to San Mateo Daily Journal. That is still nearly $20 higher than the sub-$70 levels seen in January, before U.S. and Israeli airstrikes on Iran began on February 28.
The Strait of Hormuz — a narrow waterway that carries roughly 25% of the world's maritime oil trade — has been effectively blocked since the conflict started. Massive rerouting of tankers has pushed up fuel and shipping costs globally. Analysts at Moody's warn that even a ceasefire may not bring yields back down, citing ballooning U.S. budget deficits tied to the war.
Airlines Warn Energy Costs Could Halve Their Profits
The International Air Transport Association (IATA) released a grim forecast on June 7 in Rio de Janeiro. IATA Director General Willie Walsh said that "soaring energy costs could nearly halve profits in 2026." Global airline net profits are expected to fall from $45 billion in 2025 to just $23 billion this year, according to Boston Herald.
Jet fuel is projected to average $152 per barrel in 2026 — up 70% from $90 last year. U.S. airlines saw fuel costs jump 78% year-over-year in April alone, reaching nearly $6.5 billion, per the Bureau of Transportation Statistics. Despite all this, airline shares rose Tuesday as oil prices dipped. Profit per passenger is expected to drop from $9.10 to $4.50 this year.
Treasury Yields Climb as War Reprices U.S. Debt
The 10-year Treasury yield held at 4.55% early Tuesday. That is up sharply from 4.01% in January, before the conflict began. The 30-year yield sits at 5.03%. Higher yields mean the U.S. government pays more to borrow money — a sign that investors see more risk tied to the war and rising deficits, according to Journal-Advocate.
The Federal Reserve, now led by incoming Chair Kevin Warsh after Jerome Powell's term ended May 15, is keeping its benchmark rate in the 3.50%–3.75% range. The Fed paused rate cuts in early 2026 as war-driven energy prices pushed inflation toward 4%. President Trump has been pushing for cuts, but analysts at Apollo and RSM say "higher for longer" is the likely path ahead.
Tech Stocks Lead the Dip-Buying as Geopolitical Risk Stays High
Investors are betting that AI and tech spending will hold up even as energy costs bite elsewhere. Nasdaq futures jumped 0.8% Tuesday morning, outpacing the broader market. Stocks like Nvidia and Micron led the early bounce, as buyers treat last week's sell-off as a buying opportunity, according to Trentonian.
Still, the risk picture remains complicated. The U.S. House voted to end the conflict, though a Presidential veto is expected. Fitch Ratings has revised its global airline outlook to "Deteriorating," warning that high ticket prices — U.S. domestic airfares are up as much as 31% — could eventually break consumer demand. For now, markets are cautiously moving higher, one day at a time.
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