What Happened?
A number of stocks jumped in the afternoon session after the U.S. launched "self-defense strikes" on Iran as Trump warned the country "will have to pay the price" for stalling negotiations.
WTI rose up more than 2% to $90+ on Trump's Iran escalation. Cushing inventories fell to around 22 million barrels, multi-decade lows. The EIA projects global inventory draws of 6.3 million barrels per day in Q2 and 7.6 million in Q3, as Iran's production disruption removed more than 11 million barrels per day from global supply. U.S. shale is the primary swing producer projected to fill that gap.
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:
- U.S. Shale E&P company HighPeak Energy (NASDAQ: HPK) jumped 9.6%. Is now the time to buy HighPeak Energy? Access our full analysis report here, it’s free.
- U.S. Shale E&P company Northern Oil and Gas (NYSE: NOG) jumped 4.9%. Is now the time to buy Northern Oil and Gas? Access our full analysis report here, it’s free.
Zooming In On HighPeak Energy (HPK)
HighPeak Energy’s shares are extremely volatile and have had 73 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 about 23 hours ago when the stock dropped 6.2% on the news that Trump said a US-Iran deal could come in "two or three days," pulling energy equities sharply lower as investors priced out the conflict premium.
That narrative collapsed at midday when US Central Command confirmed an American Apache helicopter had gone down near the coast of Oman, and Trump said the US "must respond" to what he described as an Iranian attack over the Strait of Hormuz. Rather than a clean reversal, the helicopter incident created deeper uncertainty for the sector.
Oil prices might have recovered some losses on re-escalation risk, but a potential US military response introduces physical infrastructure risk across the Gulf that is harder to price than a headline ceasefire. The sector's net decline reflected a day where the bullish and bearish cases cancelled each other out, leaving investors unwilling to commit either way.
HighPeak Energy is up 79.6% since the beginning of the year, but at $8.03 per share, it is still trading 32.5% below its 52-week high of $11.90 from June 2025. Despite the year-to-date gain, investors who bought $1,000 worth of HighPeak Energy’s shares 5 years ago would now be looking at only $826.98.
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