US stocks stay near highs despite Iran war hitting oil supply
Updated
Updated · Bloomberg · May 5
US stocks stay near highs despite Iran war hitting oil supply
10 articles · Updated · Bloomberg · May 5
John Authers said two shocks dominate markets: war-related disruption to global crude supplies and heavy investment in artificial intelligence.
The report says the AI spending boom is still outweighing the oil shock, helping keep US equities close to record levels.
It portrays normal investing, finance and economic cycles as distorted by the combined effects of geopolitical conflict and the race to build AI.
With AI stocks soaring despite a historic oil crisis, which of these two powerful economic forces will ultimately break first?
As AI creates wealth and war drives inflation, is the global economy entering a new era of growth or stagflation?
Can global energy grids and supply chains sustain both the AI revolution's demand and a crippling Mideast oil shock?
S&P 500 Surges Past 7,000 as Fragile Ceasefire Masks Persistent Middle East Energy Crisis
Overview
In April 2026, U.S. equity markets surged to record highs, driven by hopes from a ceasefire between the US and Iran and strong corporate earnings, especially from Big Tech. Despite this optimism, Brent crude oil prices spiked sharply due to ongoing Middle East instability and attacks on energy infrastructure, fueling inflation and prompting a cautious Federal Reserve. Iran's announcement reopening the Strait of Hormuz briefly lowered oil prices, but war damage and safety concerns kept tanker traffic low, causing a persistent global oil supply shortfall. This shortage disrupted agriculture and raised food prices, weakening consumer spending and triggering warnings from the IMF about global economic risks. Experts caution that renewed conflict or sustained high energy costs could force interest rate hikes, corporate earnings downgrades, and a significant market correction.