What Happened?
A number of stocks fell in the afternoon session after energy stocks pulled back despite oil prices remaining structurally elevated, as WTI crude fell 1.76% to $91.40 a barrel (still more than 40% above year-ago levels).
The president said US-Iran talks were "progressing well" and reiterated he would be "honored" to meet Iran's supreme leader to make a deal, raising the possibility that Strait of Hormuz disruptions could ease faster than the market had priced. Energy stocks trade a risk premium derived from supply scarcity. If a ceasefire materializes, that premium unwinds sharply.
The stronger-than-expected jobs report added a second layer: higher interest rates increase the cost of capital for exploration and production companies carrying significant debt, compressing returns on future investment. Investors reduced exposure ahead of any deal announcement rather than waiting to react.
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 Solaris Energy Infrastructure (NYSE: SEI) fell 7.8%. Is now the time to buy Solaris Energy Infrastructure? Access our full analysis report here, it’s free.
- Oilfield Services company Liberty Energy (NYSE: LBRT) fell 7.5%. Is now the time to buy Liberty Energy? Access our full analysis report here, it’s free.
- Mixed or Offshore Upstream E&P company Gevo (NASDAQ: GEVO) fell 7.9%. Is now the time to buy Gevo? Access our full analysis report here, it’s free.
Zooming In On Gevo (GEVO)
Gevo’s shares are extremely volatile and have had 54 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 18 days ago when the stock gained 4.8% on the news that crude oil pushed back above $100 a barrel, with Brent near $111 and WTI close to $108.
The move followed fresh comments from President Trump that "the Clock is Ticking" for Iran, a drone attack on the UAE's Barakah nuclear plant over the weekend, and the continued closure of the Strait of Hormuz, a chokepoint that normally carries about 20% of the world's oil. The Energy Select Sector SPDR Fund (XLE) gained roughly 2.4%, with Exxon, Chevron and ConocoPhillips leading. Supply data added to the squeeze: U.S. crude inventories fell 4.3 million barrels in early May, dropping below the five-year average, while natural gas futures jumped. The risk for investors remained symmetrical as any de-escalation could reverse the move just as quickly.
Gevo is down 20.6% since the beginning of the year, and at $1.64 per share, it is trading 41.1% below its 52-week high of $2.78 from March 2026. Investors who bought $1,000 worth of Gevo’s shares 5 years ago would now be looking at only $183.50.
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