Todd Gordon Sees Crude Oil Falling Into $80s-$70s as S&P 500 Extends 10.5% Gain
Updated
Updated · CNBC · May 26
Todd Gordon Sees Crude Oil Falling Into $80s-$70s as S&P 500 Extends 10.5% Gain
1 articles · Updated · CNBC · May 26
WTI crude could drop from the $90s into the $80s and possibly $70s, Gordon said, arguing markets are structurally positioning for a Middle East resolution despite headline-driven swings.
VIX has already fallen below its April low while crude still holds above its April trough near $83 a barrel, a divergence he reads as a signal that equities are stronger than oil prices imply.
JETS has broken above its April highs after airlines were hit by airspace closures, flight cancellations and higher jet fuel costs, reinforcing his view that crude is overpriced.
Energy remains the top-performing sector, up 32% year to date versus technology's 29%, but Gordon said he would start trimming an overweight energy position and add to tech if the XLK/XLE ratio breaks higher.
The call comes as Trump says a deal with Iran is largely negotiated, though fresh U.S. strikes and warnings from Saudi Aramco that supply may not normalize until 2027 keep the oil outlook volatile.
Why do markets expect cheap oil amid warnings of the worst supply crisis in history?
With two key shipping lanes disrupted, is the global economy facing an unprecedented supply chain crisis?
S&P 500 Rally and Oil Price Volatility: How Middle East Geopolitics and the Strait of Hormuz Are Shaping Global Markets in 2026
Overview
As of late May 2026, global markets are shaped by a strong equity rally and volatile energy prices, both driven by ongoing geopolitical tensions. The S&P 500 surged 10.4% in April, marking its best month since 2020, despite a tough start to the year. This momentum continues as market leadership shifts from dominant tech giants to small-cap and non-tech companies, helped by lower interest rates and a resilient U.S. economy. Meanwhile, energy prices remain high due to the Iran conflict, but a resolution could trigger a sharp drop in oil prices, impacting sectors differently and influencing inflation and monetary policy.