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Chicago, IL – May 11, 2026 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Micron (MU - Free Report) , Exxon Mobil (XOM - Free Report) and RWE AG (RWEOY - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Global Oil Shock Modeling: Zacks May Market Strategy
To explore a critical macro subject for investors, and currently more formally understand the consequences of this global oil shock? Click this hot link:
The macro modeling exercise was undertaken by Lutz Kilian, Michael D. Plante, Alexander W. Richter and Xiaoqing Zhou of the Dallas Fed.
I. An Introduction to Macro Oil Shock Modeling
“The outbreak of the Iran War in February 2026 caused a major disruption to oil trade and resulted in a surge in oil prices, which was quickly reflected in higher retail gasoline prices.”
“A question of great interest to policymakers and market participants is to what extent recent and future retail gasoline price increases driven by this geopolitical event will raise headline and possibly core inflation.”
“There is also concern that these gasoline price increases may raise household inflation expectations, amplifying the direct impact of higher gasoline prices.”
“Interest in this question surged in late March 2026.”
“For example, political observers highlighted how E.U. central bankers are agonizing over how to respond to the inflationary pressures caused by the Iran War.”
“Similarly, Federal Reserve officials expressed concern about a short-term increase in inflation stemming from rising energy prices, and the International Monetary Fund warned that ‘if prolonged, higher energy prices will lead to higher headline inflation.’
“We study this inflationary impact based on U.S. data available at the end of March 2026, reflecting the real-time data constraints faced by policymakers.”
“Our analysis helps assess the impact on U.S. inflation under a range of alternative scenarios that could play out in the future.”
MODELING THE IMPACT OF GEOPOLITICAL OIL SUPPLY DISRUPTIONS
“In March 2026, the WTI price of oil increased from about $60 per barrel in late January, before military action was anticipated, to $91 per barrel on average, alongside broad-based increases in refined product prices (e.g., gasoline, diesel, and jet fuel).”
“In our baseline specification, the magnitude of the geopolitical oil production disruption is set to 20% of global oil production (ζe = 0.2), corresponding to a cessation of all oil exports from the Persian Gulf.”
“The expected duration of this disruption is set to 3 quarters (q¯e = 0.67), matching the length of the disruption that followed the Arab-Israeli War in 1973.”
“The subsequent effects depend on when oil shipments resume.”
“For example, if the Strait reopens after one quarter, the oil price drops to $71 per barrel in quarter 2.”
“When the oil supply shortfall lasts longer than one quarter, richer dynamics arise.”
Extending the closure to two quarters causes the oil price to rise further to $132 per barrel in Q2 before falling to $85 per barrel in Q3.
If shipping resumes after three quarters, the oil price will rise even further before declining, reaching $167 per barrel in Q3.
“Taking into consideration the path of oil and gasoline prices in each case, the model predicts that closing the Strait of Hormuz for 1, 2, or 3 quarters would increase Q4/Q4 headline PCE inflation in 2026 by 0.35, 0.79 and 1.47 percentage points, respectively.”
“The corresponding effect on core PCE inflation would only be 0.18 percentage points if the closure ends after one quarter.”
“But would rise to 0.31 and 0.49 percentage points if the closure persists for two or three quarters, suggesting potentially sizable effects on core inflation.”
The massive implication: The FOMC would be forced to raise their policy rate, if there indeed is a 0.5% rise in the U.S. core PCE inflation rate.
Note that Info Tech and Energy now lead our list at “Very Attractive." That forced S&P500 sector ranking screams “AI cap-ex buildout” and “Global oil shock.”
Read on to find the large-cap stock picks in Zacks #1 Rank list to play for aligning with that earnings out-performance.
II. Zacks May 2026 Sector/Industry/Company Telescope
April 30th, 2026 data showed Info Tech remained dominant at Very Attractive. Semiconductor EPS growth stays aloft via “AI” chips. Electronics looks great.
Energy stayed Very Attractive rating; Iran plays a major factor.
Utilities fell to Attractive, as Nat Gas Distributors led. Communication Services fell to Attractive from Very Attractive. The “AI” Telco Equipment group ranked very high.
Financials stayed Market Weight. Rising global recession risk, a private credit debacle, and possible Fed rate hikes downshifted the momentum here.
Industrials stayed at a Market Weight rating. Metal Fabricating and Pollution Control took the lead in that sector.
Health Care stayed on a Market Weight group too.
Materials remained at an Unattractive rating.
The big move up?
Consumer Staples and Consumer Discretionary rose to Market Weights, from Unattractive ratings.
The Forced Ranking:
(1) Info Tech stays Very Attractive. Semis, Electronics, & Computer-Office led. A Zacks #1 Rank (STRONG BUY) Large Cap Stock: Micron
(2) Energy stays Very Attractive. Oil & Gas Integrated, Oil Miscellaneous, and Oil E&P led the way. A Zacks #1 Rank (STRONG BUY) Large Cap Stock: Exxon Mobil
(3) Utilities fell to Attractive from Very Attractive. Utility-Gas Distribution best. A Zacks #1 Rank (STRONG BUY) Large Cap Stock: RWE AG Note: RWE AG is among Europe's five largest utilities.
(4) Communications Services fell to Attractive from Very Attractive. Telco Equipment stayed strong, once again. It is an “AI” group.
(5) Industrials stayed Market Weight. Metal Fabricating, and Pollution Control looked the best.
(6) Financials stayed Market Weight. Real Estate, Finance, and Investment Banking & Brokering looked best.
(7) Health Care stayed at Market Weight. Drugs and Medical Care looked best.
(8) Consumer Staples rose to Market Weight from Unattractive. Agri-business and Food/Drug Retail looked the best.
(9) Consumer Discretionary rose to Market Weight from Unattractive. Consumer Electronics looked the best.
(10) Materials stayed Unattractive. Building Products looked OK.
Now, let’s wrap it out, and see what oil industry execs think.
III. Conclusion
The Dallas Fed views the 3-quarter shock as a plausible "stressed" baseline. It represents a world where oil hits $167, gasoline likely exceeds $5.00/gal nationally, and core inflation is dragged upward by nearly half a percent.
Will a three-quarter long global oil shock really happen?
While the working paper provides the mathematical analysis, the Dallas Fed's Energy Survey (April 2026 Update) provides the "market" probability -- based on responses from 120 oil and gas executives:
26% Probability:Executives specifically expect the disruption to last until November 2026 (3 quarters).
14% Probability:Executives expect the disruption to last longer than 3 quarters. Their Aggregated Probability?
Collectively, oil and gas industry experts currently assign a 40% probability -- to a global oil shock lasting 3 quarters, or more.
That probability is dynamic.
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Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Micron, Exxon and RWE AG
For Immediate Releases
Chicago, IL – May 11, 2026 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Micron (MU - Free Report) , Exxon Mobil (XOM - Free Report) and RWE AG (RWEOY - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Global Oil Shock Modeling: Zacks May Market Strategy
The following is an excerpt from Zacks Chief Strategist John Blank’s full May Market Strategy reportTo access the full PDF, click here.
To explore a critical macro subject for investors, and currently more formally understand the consequences of this global oil shock? Click this hot link:
“The Impact of the 2026 Iran War on U.S. Inflation: A Scenario Analysis”
It was published in April 2026.
The macro modeling exercise was undertaken by Lutz Kilian, Michael D. Plante, Alexander W. Richter and Xiaoqing Zhou of the Dallas Fed.
I. An Introduction to Macro Oil Shock Modeling
“The outbreak of the Iran War in February 2026 caused a major disruption to oil trade and resulted in a surge in oil prices, which was quickly reflected in higher retail gasoline prices.”
“A question of great interest to policymakers and market participants is to what extent recent and future retail gasoline price increases driven by this geopolitical event will raise headline and possibly core inflation.”
“There is also concern that these gasoline price increases may raise household inflation expectations, amplifying the direct impact of higher gasoline prices.”
“Interest in this question surged in late March 2026.”
“For example, political observers highlighted how E.U. central bankers are agonizing over how to respond to the inflationary pressures caused by the Iran War.”
“Similarly, Federal Reserve officials expressed concern about a short-term increase in inflation stemming from rising energy prices, and the International Monetary Fund warned that ‘if prolonged, higher energy prices will lead to higher headline inflation.’
“We study this inflationary impact based on U.S. data available at the end of March 2026, reflecting the real-time data constraints faced by policymakers.”
“Our analysis helps assess the impact on U.S. inflation under a range of alternative scenarios that could play out in the future.”
MODELING THE IMPACT OF GEOPOLITICAL OIL SUPPLY DISRUPTIONS
“In March 2026, the WTI price of oil increased from about $60 per barrel in late January, before military action was anticipated, to $91 per barrel on average, alongside broad-based increases in refined product prices (e.g., gasoline, diesel, and jet fuel).”
“In our baseline specification, the magnitude of the geopolitical oil production disruption is set to 20% of global oil production (ζe = 0.2), corresponding to a cessation of all oil exports from the Persian Gulf.”
“The expected duration of this disruption is set to 3 quarters (q¯e = 0.67), matching the length of the disruption that followed the Arab-Israeli War in 1973.”
“The subsequent effects depend on when oil shipments resume.”
“For example, if the Strait reopens after one quarter, the oil price drops to $71 per barrel in quarter 2.”
“When the oil supply shortfall lasts longer than one quarter, richer dynamics arise.”
Extending the closure to two quarters causes the oil price to rise further to $132 per barrel in Q2 before falling to $85 per barrel in Q3.
If shipping resumes after three quarters, the oil price will rise even further before declining, reaching $167 per barrel in Q3.
“Taking into consideration the path of oil and gasoline prices in each case, the model predicts that closing the Strait of Hormuz for 1, 2, or 3 quarters would increase Q4/Q4 headline PCE inflation in 2026 by 0.35, 0.79 and 1.47 percentage points, respectively.”
“The corresponding effect on core PCE inflation would only be 0.18 percentage points if the closure ends after one quarter.”
“But would rise to 0.31 and 0.49 percentage points if the closure persists for two or three quarters, suggesting potentially sizable effects on core inflation.”
The massive implication: The FOMC would be forced to raise their policy rate, if there indeed is a 0.5% rise in the U.S. core PCE inflation rate.
Note that Info Tech and Energy now lead our list at “Very Attractive." That forced S&P500 sector ranking screams “AI cap-ex buildout” and “Global oil shock.”
Read on to find the large-cap stock picks in Zacks #1 Rank list to play for aligning with that earnings out-performance.
II. Zacks May 2026 Sector/Industry/Company Telescope
April 30th, 2026 data showed Info Tech remained dominant at Very Attractive. Semiconductor EPS growth stays aloft via “AI” chips. Electronics looks great.
Energy stayed Very Attractive rating; Iran plays a major factor.
Utilities fell to Attractive, as Nat Gas Distributors led. Communication Services fell to Attractive from Very Attractive. The “AI” Telco Equipment group ranked very high.
Financials stayed Market Weight. Rising global recession risk, a private credit debacle, and possible Fed rate hikes downshifted the momentum here.
Industrials stayed at a Market Weight rating. Metal Fabricating and Pollution Control took the lead in that sector.
Health Care stayed on a Market Weight group too.
Materials remained at an Unattractive rating.
The big move up?
Consumer Staples and Consumer Discretionary rose to Market Weights, from Unattractive ratings.
The Forced Ranking:
(1) Info Tech stays Very Attractive. Semis, Electronics, & Computer-Office led.
A Zacks #1 Rank (STRONG BUY) Large Cap Stock: Micron
(2) Energy stays Very Attractive. Oil & Gas Integrated, Oil Miscellaneous, and Oil E&P led the way. A Zacks #1 Rank (STRONG BUY) Large Cap Stock: Exxon Mobil
(3) Utilities fell to Attractive from Very Attractive. Utility-Gas Distribution best.
A Zacks #1 Rank (STRONG BUY) Large Cap Stock: RWE AG
Note: RWE AG is among Europe's five largest utilities.
(4) Communications Services fell to Attractive from Very Attractive. Telco Equipment stayed strong, once again. It is an “AI” group.
(5) Industrials stayed Market Weight. Metal Fabricating, and Pollution Control looked the best.
(6) Financials stayed Market Weight. Real Estate, Finance, and Investment Banking & Brokering looked best.
(7) Health Care stayed at Market Weight. Drugs and Medical Care looked best.
(8) Consumer Staples rose to Market Weight from Unattractive. Agri-business and Food/Drug Retail looked the best.
(9) Consumer Discretionary rose to Market Weight from Unattractive. Consumer Electronics looked the best.
(10) Materials stayed Unattractive. Building Products looked OK.
Now, let’s wrap it out, and see what oil industry execs think.
III. Conclusion
The Dallas Fed views the 3-quarter shock as a plausible "stressed" baseline.
It represents a world where oil hits $167, gasoline likely exceeds $5.00/gal nationally, and core inflation is dragged upward by nearly half a percent.
Will a three-quarter long global oil shock really happen?
While the working paper provides the mathematical analysis, the Dallas Fed's Energy Survey (April 2026 Update) provides the "market" probability -- based on responses from 120 oil and gas executives:
26% Probability:Executives specifically expect the disruption to last until November 2026 (3 quarters).
14% Probability:Executives expect the disruption to last longer than 3 quarters.
Their Aggregated Probability?
Collectively, oil and gas industry experts currently assign a 40% probability -- to a global oil shock lasting 3 quarters, or more.
That probability is dynamic.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Get all the details here >>
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.