Breaking news late Thursday: The dockworkers’ strike has ended. The union will return to work with a 62% raise as part of a tentative agreement, though negotiations will continue around automated technology until January.

Our focus today is how geopolitics are moving oil prices — and the US stocks that are up as a result.

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War looks bullish for energy

Two things have pushed oil prices higher for several days in a row. 

1. Intensifying tensions between Iran and Israel that threatens oil inventory in Iran

2. Houthi rebel attacks in the Red Sea that could limit oil supply and deliveries

Since markets are forward-looking, rising oil prices reflect market expectations for either of those two items to potentially get worse.

Brent crude, the international oil benchmark, has climbed about 9% over the last week to about $78 a barrel. US prices have jumped by a similar amount, seeing a particular bounce Thursday after unclear comments from Joe Biden.

Wall Street has taken notice — share prices for companies in oil, gas, and drilling have moved higher with crude prices. 

The S&P 500 has dropped nearly 1% in that stretch.

The energy sector within that index has rallied nearly 7%.

Here’s how some of the biggest companies from the sector have done over the last five days of trading:

• Exxon Mobil: +7.5%

• Chevron: +6.1%

• ConocoPhillips: +9.6%

• Marathon Petroleum: +6.4%

The Middle East has faced heightened turmoil since October 7 of last year. On Tuesday this week, Iran sent a volley of missiles toward Israel, and experts now anticipate a retaliation could happen at any moment.

The region accounts for about one-third of the world’s total oil supply. Any damages to crude production facilities or the supply chain could push prices higher for both oil and related stocks, which have seen a similar price trajectory this year.

Brent crude remains well below its 2024-high of $91.17 a barrel, which it touched in April.

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Elsewhere:

💼 The September jobs report is due today. Analysts expect the US added 140,000 non-farm jobs in the month, slightly lower than August. Meanwhile, the median estimate for the unemployment rate is 4.2%, the same as the prior month. (FactSet)

📈 Nvidia stock surged yet again. The Thursday rally followed news of the chip giant investing in OpenAI, the creator of ChatGPT, plus comments from Jensen Huang about “insane” customer demand. Earlier this week, OpenAI said it raised $6.6 billion in new funding to bring its total valuation to $157 billion. (Barron’s)

⛈️ Hurricane Helene has been devastating. It’s become one of the deadliest US hurricanes since 1950, potentially reshaping multiple housing markets across the Southeast. If the storm’s fallout leads to a wave of damaged resale homes hitting the market, it could put downward pressure on housing prices. (ResiClub)

🏢 Amazon could fire 13,834 managers and save $3 billion. That’s according to Morgan Stanley estimates. Amazon CEO Andy Jassy wants to lower the ratio of managers to individual contributors, and the bank sees a path forward. The estimate assumes about 7% of the company holds a management position. (Business Insider)

Rapid-fire:

• Apple CEO Tim Cook sold more than 223,000 shares of Apple stock for about $50 million (Apple Insider)

• US services activity in September expanded at the fastest rate since early 2023 (Bloomberg)

• Mortgage rates on the most popular US home loan climbed to 6.12%, up from 6.08% a week earlier (Yahoo Finance)

• Binance’s crypto market share dropped to its lowest level in four years (Bloomberg)

• AI can only do 5% of jobs, according to an MIT economist who doesn’t think the tech will live up to the hype (Bloomberg)

Last thing:

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