What happened?

A number of stocks jumped in the afternoon session after President Donald Trump indicated he is no longer interested in reaching a deal with Iran to conclude their war, triggering a sharp jump in crude oil prices and renewed inflation concerns. 

The sudden escalation in geopolitical tensions between the United States and Iran raised immediate fears of potential supply disruptions across global energy markets. Iran is a prominent oil producer, and escalating friction threatens key regional shipping routes and production infrastructure. 

As benchmark crude prices climbed rapidly on the announcement, energy companies saw increased investor demand, given that higher commodity prices directly lift revenues and cash flows for oil exploration and production firms. At the same time, the price spike reignited inflation concerns on Wall Street, prompting benchmark bond yields to move higher as investors weighed the risk of persistent price pressures throughout the broader economy. 

While broader equity indexes ultimately stabilized after digesting the swings, energy equities benefited significantly from the surge in oil prices sparked by the deteriorating diplomatic backdrop.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Mixed or offshore upstream E&P company Talos Energy jumped 4.1%. Is now the time to buy Talos Energy? Access our full analysis report here, it’s free.
• Mixed or offshore upstream E&P company SM Energy jumped 5.5%. Is now the time to buy SM Energy? Access our full analysis report here, it’s free.
• Oilfield services company ProPetro jumped 3%. Is now the time to buy ProPetro? Access our full analysis report here, it’s free.
• Mixed or offshore upstream E&P company Peabody Energy jumped 2.8%. Is now the time to buy Peabody Energy? Access our full analysis report here, it’s free.
• U.S. shale E&P company Riley Exploration Permian jumped 3.5%. Is now the time to buy Riley Exploration Permian? Access our full analysis report here, it’s free.

Zooming in on SM Energy

SM Energy’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 1 day ago when the stock gained 4.3% on the news that shipping attacks in the Persian Gulf sparked renewed supply concerns, driving crude oil prices sharply higher. The Wall Street Journal reported that front-month Brent crude rose 1.2% to $92.55 a barrel, recovering from a sharp selloff. West Texas Intermediate futures rose 0.7% to $86.67. The Journal said the strikes tempered expectations of a diplomatic resolution to the U.S.-Iran conflict, and that supply risks in the region persist. A bottleneck in that shipping lane can tighten the crude available to buyers and add a geopolitical premium to the price. Higher oil prices can support revenue and cash flow for producers.

SM Energy is up 71.7% since the beginning of the year, but at $32.85 per share, it is still trading 20.4% below its 52-week high of $41.29 from September 2026. Despite the year-to-date gain, investors who bought $1,000 worth of SM Energy’s shares 5 years ago would now be looking at only $951.13.

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