Monday, 25 May 2026 · New York Edition · 09:00 New York

Oil plunges on Iran deal. Treasury market is split in two.

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Signals

Oil

Oil prices tumbled on reports the US is close to a deal ending the war with Iran, with the Strait of Hormuz reopening anticipated. Trump says there's 'no rush,' but crude slid sharply, with USO falling 5.6% this week and 1.1% in the prior session, pulling energy stocks down with it. The reversal exposes the air pocket under the war premium — bullish positioning had been crowded, and any de-escalation triggers fast CTAs unwinding.

USO

Sell US Oil Fund — MarketWatch reports oil tumbling on apparent peace deal, with USO down 5.6% this week — the war premium is rapidly unwinding.

$140.9 -1.14%
XLE

Sell Energy Select Sector — Sliding crude drags energy stocks, and XLE, though up 30% YTD, is already 6% off its 52-week high — momentum turning negative.

$59.49 +0.61%

Rates divergence

Bloomberg argues yields will stay elevated even if the Iran war ends, citing structural drivers beyond war-related inflation. BlackRock counters that sufficient factors exist for a Fed cut, setting up a sharp divide. TLT sits just 8% above its 52-week low, having rallied slightly in the prior session; IEF is similarly pinned near its trough. The next inflation print or Fed guidance will likely tip the balance.

TLT

Watch Long-duration Treasuries — Bloomberg says yields stay high (bearish for bonds); BlackRock says cut justified (bullish) — the debate is unresolved, and TLT is near its 52-week low, so a dovish pivot would squeeze shorts hard.

$84.68 +0.55%
IEF

Watch Intermediate Treasuries — The same yield tug-of-war hits intermediate bonds; IEF is also close to its 52-week low, making the rate direction a binary event for this segment.

$93.88 +0.09%

China AI

Despite April retail sales being the weakest since COVID, fund managers and analysts flag AI as the cleanest Chinese equity theme, with Morgan Stanley overweight on names like Tencent and Alibaba. CNBC reports the CSI 300 is up over 4.5% this year, but Alibaba is down 16.5% YTD and Tencent down 30.4% — the underperformance may offer an entry if the AI narrative gains traction.

BABA

Buy Alibaba — CNBC notes Alibaba is a top holding for the Gavekal manager and Morgan Stanley is overweight, with the stock down 33% from its 52-week high — AI monetisation could re-rate shares.

$130.0 -1.12%
TCEHY

Buy Tencent — CNBC highlights Tencent as another major AI beneficiary held by the same manager, yet the stock is down 36% from its 52-week high — the divergence from the AI theme may close.

$56.07 -1.32%

UK lending

Bank lending to UK businesses has fallen to its lowest level in nearly 30 years, according to the FT, driven by weak economic growth and tighter regulation. SMEs are especially squeezed. Lloyds and Barclays, heavily exposed to domestic lending, face revenue headwinds; both stocks have rallied in the past week but remain well below 52-week highs.

LLOY.L

Sell Lloyds Banking Group — FT reports a 30-year low in UK business lending, directly hitting Lloyds' core revenue; despite a +4.6% 1w bounce, it trades at 1.2x P/B with structural headwinds.

$99.60 +1.10%
BARC.L

Sell Barclays — Barclays also suffers from the lending drought, particularly in SME loans; the FT signal is a negative read-through for its domestic operations, even with a cheap 0.96x P/B.

$445.8 +0.99%

Gambling

Short sellers have made over $2.3bn profit betting against gambling companies, the FT reports, as online groups face pressure from prediction markets in the US and steep UK tax rises. DraftKings is down 29.6% YTD and the broader BETZ ETF is off 11.9%, reflecting deep sector pessimism. The headwinds show no signs of abating.

BETZ

Sell Sports betting ETF — FT details $2.3bn in short profits across the sector; BETZ already down 11.9% YTD, and structural threats from prediction markets and taxes justify further downside.

$18.43 -0.19%
DKNG

Sell DraftKings — A primary short target, DraftKings has cratered 29.6% YTD; competition from prediction markets is a direct threat to its core offering.

$25.12 -1.10%
FLTR

Sell Flutter Entertainment — UK tax rises are a specific drag on Flutter, and the FT names it among the pressured stocks, even though it has held flat YTD.

$25.57 +0.04%

Energy income

CNBC highlights three energy stocks with strong dividends and analyst buy ratings: Energy Transfer yields 6.7% and just raised its distribution; Chevron yields 3.7% with Wells Fargo bullish; Williams Companies yields 2.7% with a new UBS target. Energy Transfer and Williams are near 52-week highs, signaling momentum, while Chevron is off its peak but still up 23% YTD.

ET

Buy Energy Transfer — CNBC reports a 6.7% yield, a distribution increase, and TD Cowen raising its price target to $23; ET is only 3% below its 52-week high, showing strong momentum.

$20.07 +0.30%
CVX

Buy Chevron — Wells Fargo analyst reiterates buy with a $222 target; CVX yields 3.7% and is up 23% YTD, though 11% below its 52-week high — offering a pullback entry.

$191.4 +0.22%
WMB

Buy Williams Companies — UBS raised its target to $91, implying upside; WMB yields 2.7% and sits just 2% off its 52-week high, a momentum play with income.

$78.47 +1.23%

Cash-rich buys

Wolfe Research screened for companies with high net cash-to-market cap ratios and Wall Street buy ratings, CNBC reports. Deckers Outdoor has a 12% ratio and has jumped 12.7% in the past week on strong earnings; Okta's 15% cash ratio and high growth make it a defensive tech pick; Airbnb is an 11% cash-holder with 20% analyst upside despite near-term pressure.

DECK

Buy Deckers Outdoor — CNBC flags DECK's 12% net cash ratio and buy rating; shares surged 12.7% this week, but at 1.8x P/B and below its 52-week high, the cash cushion provides downside protection.

$106.7 +3.95%
ABNB

Buy Airbnb — With 11% cash ratio and 20% analyst upside, ABNB is a cash-rich value; it is down 0.5% YTD and 10% below its high, offering a buy-in opportunity.

$132.3 -1.42%
OKTA

Buy Okta — Okta's 15% net cash ratio, up 10% YTD and with a 21.8x forward P/E, makes it a cash-rich growth pick with buy ratings, as CNBC notes.

$92.24 +3.13%

Policy put fades

The FT argues that policymakers' capacity to respond to shocks has diminished across the board, eroding the 'policy put' that has underpinned equities for years. While the S&P 500 is up 9.1% YTD and just 1% off its all-time high, the removal of this backstop increases downside risk. The VIX, though down in the prior session, is still 14.7% higher YTD, suggesting some degree of nervousness.

VIX

Buy Volatility Index — Without a central bank backstop, volatility should structurally rise; VIX at 16.64 is still below mid-range, offering potential upside in a risk-off move.

$16.64 -0.36%
SPY

Watch S&P 500 ETF — FT's warning on policy put erosion is a cautionary macro flag; SPY near highs and with a trailing P/E of 28x, the risk/reward is skewing negatively.

$745.6 +0.39%

Most original take

Matthew Burgess, Masaki Kondo · Bloomberg Markets · 24 May 2026

Strategists Warn Yields to Stay High Even If Iran War Ends

Bloomberg argues that even if the Iran war ends, bond yields will remain elevated due to structural factors like fiscal profligacy, deglobalization, and demographic shifts, not just war-driven inflation premiums. This challenges the consensus that a peace deal would spark a bond rally, suggesting instead that the sell-off has deeper roots and may persist.

Read original ↗

Our view

Today's signals paint a market in transition: oil is dumping on peace hopes (USO down 5.6% this week), yet bond markets remain stubbornly split on where yields go from here. The S&P 500 clings to a 9% YTD gain and is just 1% off its all-time high, while the VIX meanders at 16.6 — priced for calm, not the end of the policy put that the FT warns about. The energy sector, up 30% YTD, now faces a sharp reversal. This isn't a correction; it's a rotation where the old leaders are being challenged and new ones haven't clearly emerged.

The counterargument is that this very confusion creates opportunity. If oil's decline removes an inflation tailwind, real rates could ease, letting growth stocks breathe. TLT sits near its 52-week low — the short-duration trade is stretched — and a single dovish Fed nod could trigger a violent short squeeze. BlackRock's call for a cut under new Chair Warsh is precisely that catalyst. The bears have it right on structural yields, but positioning says the immediate risk is to the upside in bonds. Watch the SOFR futures curve for the tell.

What's missing from today's coverage is the second-order effect of a peace deal on energy infrastructure. A reopening of Hormuz and post-conflict rebuilding will drive demand for materials, heavy equipment, and logistics — none of which appears in the day's headlines. The press is fixated on the binary oil move, but the real trade may be in the industrials that benefit when the shooting stops.

The cleanest expression right now is not a single ticker. It's to fade the consensus that energy wins regardless. Favour energy income stocks that are less levered to crude — like the dividend picks from CNBC — over outright oil exposure. And keep a close eye on those beaten-down Chinese AI names; if global risk appetite returns on a peace bump, the rotation into cheap growth could be fierce.

Friday's signals, today

From the New York Edition on 22 May 2026 — 4/5 signals moved in the predicted direction.

Today's scan: 126 articles considered · 9 surfaced · across 11 publishers

Generated Mon 25 May 2026 8:05am New York · 4,540 views

Bloomberg Markets · CNBC Investing · CNBC Markets · CoinDesk · FT Alphaville · FT Companies · FT Lex · FT Markets · MarketWatch Top · Nikkei Asia · SCMP Business · The Information · WSJ Business · WSJ Markets

Next edition: London Edition tomorrow at 07:30 London.

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