Billionaire investor Paul Tudor Jones is betting oil could rise another $25 a barrel and warning that 2027 could be a “really, really challenging” year for stocks.
“Long oil, bullish on oil, I think it can rally another 20 or 25 bucks,” the Tudor Investment Corp. founder told CNBC Tuesday.
Asked how stocks would react, he replied: “Well, it’ll hate it. Absolutely totally hate it.”
Why Jones Is Bullish on Oil
Jones suspects President Donald Trump could take a tougher approach to Iran after the Nov. 3 midterm elections. If a softer solution existed, he argued, it would likely have emerged by now.
“It’s kind of like the sword of Damocles sitting over the oil market post the midterms,” Jones said, acknowledging he had no inside knowledge of Trump’s plans.
Trump said last Thursday the U.S. would not attack Iran before the elections, while Tehran has been preparing for renewed hostilities.
WTI crude traded near $94 Tuesday. A $20-to-$25 increase would take it to roughly $114-$119, although Jones did not specify a benchmark or deadline.
On Kalshi, traders put the chance of WTI settling above $115 before December 31 at around 33%, and above $120 at 26%.
Kalshi and Benzinga have an existing data collaboration agreement.
A Strong Fourth Quarter Before a Tough 2027?
Jones sees a strong fourth-quarter rally as “very possible” based on historical midterm-election patterns, which often see stocks bottom in late October or early November.
But he compared today’s AI-driven, “two-speed” market to 1999, when technology stocks surged before the dot-com crash.
“2027 is going to be really, really challenging for the stock market,” he warned.
His concern is less about valuations than about the supply of shares. Buybacks and acquisitions have supported stocks for years by reducing available shares, but IPOs and insider sales could reverse that trend.
“You’ve probably got the most negative flow picture for the U.S. stock market that we’ve had say since 2002,” Jones said.
Jones cited SpaceX (NASDAQ:SPCX), which went public in June but still has billions of shares held by insiders and early investors restricted from sale until 2027.
He also pointed to potential IPOs from Anthropic and OpenAI. Jones fears the combination of new listings and insider share sales could overwhelm investor demand, pushing stock prices lower.
Goldman Sachs forecasts $600 billion in new stock issuance next year, while another $1.7 trillion in previously restricted shares could become eligible for sale. The bank says the resulting increase in stock supply could be the largest since 2000.
However, Goldman expects $1.7 trillion in corporate buybacks and believes many newly unlocked shares won’t actually be sold. Unlike Jones, the bank expects the stock market rally to continue.
The United States Oil Fund (NYSE:USO) rose about 0.7% late Tuesday morning, while SpaceX shares fell nearly 4% and the SPDR S&P 500 ETF Trust (NYSE:SPY) edged lower.
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