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Traffic through the Strait of Hormuz has remained at a standstill since the U.S. and Iran announced a ceasefire last week.
Credit: CFOTO / Future Publishing via Getty Images

Key Takeaways

• Oil prices plummeted to their lowest level in more than a month on Friday after Iran declared the Strait of Hormuz "completely open" for the duration of a 10-day ceasefire between Israel and Lebanon.
• Progress toward a U.S.-Iran peace agreement in recent weeks caused oil prices to slide and stocks to soar as investors bet the weeks-long conflict will cause less damage to the economy than once feared.

The announcement traders have been waiting weeks for has arrived.

Oil prices plummeted Friday after Iranian foreign minister Abbas Araghchi said the Strait of Hormuz was “completely open” to commercial traffic following yesterday's announcement of a ceasefire between Israel and Lebanon. West Texas Intermediate futures, the U.S. crude oil benchmark, tumbled nearly 10% to close at $85.57 a barrel, the lowest price in over a month. Brent crude, the global benchmark, fell 6% to $92. 

Energy stocks followed oil prices lower Friday, with the S&P 500 energy sector sliding 3%. Airlines and cruise operators, for whom fuel is a major expense, were at the top of the list of the S&P’s best-performing stocks. (Follow Investopedia's live coverage of today's trading here.)

Why This Is Important

Economist have warned that the oil shock caused by the Iran war could push the U.S. economy toward recession—or even stagflation, the central banker's nightmare scenario of high inflation and low growth. Easing oil prices take some pressure off the economy, and give policymakers more flexibility to deal with other stressors, like a wobbly labor market.

Israel and Lebanon on Thursday agreed to a 10-day ceasefire that went into effect at midnight local time on Friday. The fighting in Lebanon has been a roadblock to U.S.-Iran peace talks, with Iran conditioning the continuation of talks on a ceasefire with Hezbollah, the Iran-backed Lebanese armed group and political party. Until Thursday, Israel had resisted calls for a truce in Lebanon; President Donald Trump on Friday wrote on Truth Social that "Israel will not be bombing Lebanon any longer." Investors are optimistic the pause there opens the door to an extension of the U.S.-Iran ceasefire or a resolution of the war. 

Fighting in the Middle East has caused the largest oil supply shock in history, according to the International Energy Agency. Traffic in the Strait of Hormuz, through which about one-fifth of the world’s oil and liquefied natural gas passed before the war, slowed to a trickle last month when Iran threatened to strike ships tied to U.S. allies and began charging tolls on all other ships.

Oil prices skyrocketed after the strait was closed, rising nearly 70% between late February and their peak earlier this month. That fed through to gas and diesel prices, leading consumer inflation to surge to its highest level since 2024 and consumer sentiment to crater.

With the economic risks from the war receding with oil prices, investors have refocused in recent weeks on the tailwinds that lifted stocks to record highs earlier this year. Investors expect corporate earnings to grow at a healthy clip, aided by Washington's deregulation spree, stimulus from recent tax cuts, and the tech industry's huge investments in artificial intelligence. The S&P 500 rose 1.2% Friday to close at a record high for the third consecutive day.

Still, despite Friday's slump, crude oil prices remain about 25% above their pre-war levels. Experts warn it will take months for Middle East oil production and exports to normalize, assuming the ceasefire holds and the parties to the war can bridge the chasm between their respective visions for peace. Prices at the gas pump are likely to take even longer to fall than oil prices.

Update—April 17, 2026: This article has been updated with Friday's closing prices.

Entering Friday's session, the stock was up 15% since the start of the year.
Credit: Michael Yanow / NurPhoto / Getty Images

Key Takeaways

• Netflix shares plunged early Friday after the company issued a revenue outlook that disappointed investors, offsetting better-than-anticipated first-quarter results.
• Still, several analysts reiterated their bullish views on Netflix, noting that growth is continuing at a solid pace.

Can Netflix shares extend their rebound after their latest stumble? Stranger Things have happened.

Netflix (NFLX) shares were down 10% in early trading Friday after the company issued a lower-than-expected revenue forecast for the second quarter and announced that co-founder Reed Hastings is leaving the company at the end of his current term on the company's board of directors. Despite the slump, many analysts outlined reasons they are staying bullish on Netflix on Friday.

JPMorgan analysts said there was "no change to our positive view" on Netflix's trajectory following the results, but understand the stock's decline as some investors may have had their hopes up that Netflix would raise its full-year forecasts.

Several analysts, including those from JPMorgan and Morgan Stanley, said they would be buyers of the Friday weakness in Netflix stock.

Why This Matters to Investors

Friday's move suggests that Netflix had a particularly high bar to impress investors who were expecting a much rosier outlook from the company. Several analysts said they expect the stock price will rebound from the initial post-earnings sell-off.

"We believe that after investors digest the positive growth in the quarter, expanding margins, and the company’s ability to continue to post manageable growth in low- to midteens, share price will rebound," William Blair analysts wrote, adding that there was nothing aside from high investor expectations to warrant a sell-off in the report.

Goldman Sachs analysts, however, said they expect investors will have questions about the pace of Netflix's revenue growth and margin trajectory in the next several quarters, as its latest price increase takes effect and Netflix continues to spend on content and technology.

Netflix projected 13% revenue growth in the current quarter, just short of the 14% consensus estimate of analysts surveyed by Visible Alpha. The company left its full-year revenue guidance unchanged at $50.7 billion to $51.7 billion.

The disappointing outlook overshadowed first-quarter results that topped Wall Street expectations. The company reported earnings per share of $1.23 on a 16% year-over-year jump in revenue to $12.25 billion for the period.

Netflix shares had rallied leading up to the report as investors cheered Netflix's decision to back out of the bidding war for Warner Bros. Discovery (WBD), and its latest price increase announced last month.

Entering Friday's session, the stock was up 15% since the start of the year, far outpacing the gains of the benchmark S&P 500.

News of the day for April 17, 2026

The S&P 500 and Nasdaq closed at record highs the past two days.
Credit: Timothy A. Clary / AFP / Getty Images

Stock futures are rising this morning after another record-setting session on Thursday amid hopes for a deal to end the Iran war; oil prices are sliding after President Trump once again expressed confidence in a possible agreement with Iran, while a ceasefire between Israel and Lebanon took effect; Netflix shares are tumbling after the streaming giant issued a disappointing revenue outlook and co-founder Reed Hastings announced plans to leave the company's board; Oracle shares have gained nearly 30% so far this week and are pointing higher again this morning; and a busy week of bank earnings is closing with results from several smaller financial institutions today. Here's what you need to know today.

Stock Futures Rise After S&P 500, Nasdaq Set New Highs

Stocks are poised to open higher Friday as the market wraps up a strong week fueled by optimism about a potential peace deal in the Middle East and the outlook for corporate earnings. Futures tied to the Dow Jones Industrial Average were up 0.5% recently, while those tied to the S&P 500 and Nasdaq added 0.3%. The benchmark S&P 500 and tech-heavy Nasdaq closed at record highs in each of the last two sessions. The Nasdaq enters Friday on a 12-session winning streak as investors have once again grown optimistic about AI-fueled growth. Crude oil prices were down 4% (more on that below), while gold futures held steady at around $4,800 an ounce. Bitcoin was at $75,500, down from an overnight high of $76,400 and trading at its highest levels since early February. The yield on the 1-year Treasury, which affects borrowing costs on a wide range of loans, ticked lower to 4.30%.

Oil Prices Fall as Investors Track Middle East Developments

Crude oil prices are losing ground following news of a ceasefire between Israel and Lebanon and the latest comments from President Donald Trump about the prospects for negotiations to end the Iran war. West Texas Intermediate futures were down 4.2% at $90.75 per barrel recently, while Brent futures, the international standard, dropped 3.5%. Israel has been fighting with the Iran-backed Hezbollah militia in Lebanon, but Israel and the Lebanese government agreed to a 10-day ceasefire yesterday. The truce could be tested by the fact that Hezbollah is not directly controlled by the Lebanese government, as the group has said it will keep a close eye on Israeli forces to make sure they don't violate the ceasefire, The New York Times reported. Pakistani officials are still trying to moderate the conflict between the U.S. and Iran and set up a second round of negotiations before reaching the end of the current two-week ceasefire next Wednesday, per The Associated Press. Trump, meanwhile, said the U.S. was "very close to making a deal" with Iran.

Netflix Stock Sinks on Weak Outlook, News That Co-Founder Is Leaving

Netflix (NFLX) shares are sinking ahead of the opening bell after the streaming giant reported first-quarter earnings last night. Even though the results came in above estimates, a lower-than-expected revenue growth forecast for the second quarter and news that co-founder Reed Hastings is leaving the company are dragging on the stock. The company announced that Hastings will not run for re-election to Netflix's board of directors when his current term expires in June, as the former CEO plans to depart the company to focus on his philanthropic efforts. Netflix shares were down more than 10% recently.

Oracle Stock On Track to Post Best Week in Months

Oracle (ORCL) shares are pointing higher once again this morning, as the stock gets set to close out a week of massive gains. Through Thursday's close, shares of the cloud computing giant had gained 29% so far this week, jumping to their highest point in nearly three months. The stock has been boosted by the rally lifting tech stocks broadly this week, along with new agreements to power its growing network of data centers and the launch of new AI agent software products. The stock was up roughly 2% in recent premarket trading.

More Banks Round Out Busy Week of Earnings

A busy week of earnings reports from banks continued on Friday, with Truist Financial Corp. (TFC), Fifth Third Bancorp (FITB), State Street (STT), Regions Financial (RF) and Ally Financial (ALLY) all reporting results. Big banks largely posted solid results this week, with executives touting a "resilient" U.S. economy in the first quarter. However, many of those same executives, including JPMorgan Chase's (JPM) Jamie Dimon, warned of of risks that could threaten that resiliency, such as high fuel prices and rising inflation caused by the Iran war.

Shares of Netflix were about 20% off last summer's highs heading into Thursday's results.
Credit: Mario Tama / Getty Images

Key Takeaways

• Netflix shares plunged in extended trading Thursday after the streaming giant gave a disappointing outlook.
• The company also said Co-founder and Chair Reed Hastings plans to leave Netflix's board in June.

Investors aren't cheering Netflix's latest showing.

Shares of the streaming giant were down more than 8% in extended trading after the company gave a softer-than-expected outlook and said one of its co-founders is leaving. The news overshadowed quarterly profits and revenues that topped estimates.

Netflix (NFLX) said it expects 13% revenue growth in the current quarter, just short of the 14% analysts surveyed by Visible Alpha called for. The company pointed to rising content amortization, or expenses tied the timing of title launches, for holding back profits.

Why This Matters to Investors

Netflix's stock rallied in the weeks leading up to Thursday's report, after the company pulled out of what threatened to be an expensive bidding war for Warner Bros. Discovery and raised prices. However, expectations of growing expenses are souring sentiment.

Netflix said that it expects its content amortization growth to peak this quarter, before slowing in the second half of the year. Its full-year revenue guidance was left unchanged at $50.7 billion to $51.7 billion.

The company reported earnings per share of $1.23 on a 16% year-over-year jump in revenue to $12.25 billion for the first quarter, ahead of analysts' expectations.

Co-founder Reed Hastings is set to leave his position as chair of Netflix's board in June. He will "focus on his philanthropy and other pursuits," the company said.

Hastings, previously Netflix's CEO, became co-CEO alongside Ted Sarandos in 2020, then left that role in 2023 to be replaced by Greg Peters. "My real contribution at Netflix wasn’t a single decision; it was a focus on member joy, building a culture that others could inherit and improve, and building a company that could be both beloved by members and wildly successful for generations to come," Hastings said in a statement.

Shares of Netflix were up about 15% for the year heading into Thursday's report, though still about 20% off their highs last summer.

A viewer watches QVC Germany in 2009. At its peak, the network broadcast in eight countries.
Credit: Anke Thomass / Getty Images

Key Takeaways

• QVC Group said it would file for Chapter 11, with billions in debt and a plan to exit bankruptcy in about 90 days.
• QVC and HSN lost about half their cable TV viewers between 2018 and 2024 as cord-cutting reshapes how people shop from home.

QVC Group (QVCGA), whose home shopping channels hawked everything from faux-diamond jewelry to dancing Santa figurines, said late Wednesday it would file for Chapter 11 bankruptcy.

To paraphrase Hemingway, the losses came gradually—a decade of American cord-cutting and shrinking audiences—and then all at once as debts mounted and its stock price entered free fall.

But QVC's problem isn't that Americans have stopped buying off a screen at 2 a.m. It's that most have moved online.

Why This Matters To You

QVC's bankruptcy is the clearest sign yet that live television shopping, which once reached 100 million American homes, has lost audience to social media platforms like TikTok Shop, where U.S. sales have doubled in recent years.

QVC, which also owns HSN, said in its 10-K filing that it planned to file for bankruptcy in the Southern District of Texas. The company said it expects to emerge in about 90 days under a prearranged deal with creditors. (As of Thursday afternoon, no filings appeared in online court records. QVC Group didn't respond to a request for comment.) The company twice delayed its annual filing, noting in late March "substantial doubt about the company’s ability to continue as a going concern."

Founded in the mid-1980s, QVC's first broadcast reached 7.6 million cable homes in 20 states. By the mid-2010s, QVC could be seen by more than 100 million U.S. households and aired in eight countries. The network helped launch household names—SPANX, IT Cosmetics, bareMinerals, and philosophy skin care all gained early traction on its channels.

The company's peak wasn't that long ago. In 2017, QVC bought HSN, a longtime rival, and three years later, annual revenue hit $14.18 billion. Over the next five years, revenues dropped 35%, down to $9.23 billion in 2025, with a net loss of $2.4 billion. The company ended last year with $6.6 billion in debt.

The stock price has fallen more than 99% since 2021, when home shopping got a pandemic-era boost.

QVC could long bank on loyal customers: 97% of the company's 2025 sales came from repeat buyers, who spent an average of about $896 (down from $1,460 the year before).

But the company never reached beyond its base—in 2024, almost three-quarters of QVC shoppers were women over 50, with an average age near 60. Active customers dropped from 8.1 million in 2023 to about 7 million by September 2025.

Note

Chapter 11 doesn't shut down a business. Courts typically approve "first day" motions that keep customer service, shipping, and returns running during reorganization. But things can deteriorate—when Joann's second bankruptcy filing in 2025 shifted from restructuring to liquidation, the company stopped honoring gift cards.

Home shopping isn't dying, but cable packages are. In 2015, according to Pew Research, 76% of Americans subscribed to cable or satellite TV; by 2025, that had dropped to 36%. Meanwhile, QVC and HSN lost about half their viewers from 2017 to 2024.

But the format QVC popularized—a charismatic host selling impulse buys with a countdown clock—is among the fastest-growing segments of American retail. With the global livestream commerce market estimated at about $128 billion in 2024, TikTok Shop is thriving. The social media platform's built-in marketplace is projected to surpass $20 billion in sales in 2026, more than double 2024's total.

QVC isn't the stereotype of a company caught flat-footed by new technology. In 2022, the company rebranded itself as a "live social shopping company," and in April 2025, it launched its TikTok Shop livestream. Ninety percent of new customers last year made their first purchase through a digital channel.

But even as QVC poured resources into the pivot, digital revenue dropped about $250 million year over year in 2025 to $3.97 billion. TV-driven sales were falling even faster. The live shopping market is exploding, but QVC's share of it isn't.

The price of beef continues to rise—but Americans keep buying.
Credit: Getty Images

Key Takeaways

• Beef prices are sitting at record levels, at least 14% higher than the year prior, according to the Bureau of Labor Statistics; U.S. demand for beef set a new high going back to 2000.
• "It's not a great price, but it's not a terrible price either," Dr. Michael Swanson, Chief Agricultural Economist at Wells Fargo's Agri-Food Institute said in an interview with Investopedia.

Beef is going to be tougher to swallow this grilling season.

Prices for ground, chuck and steak have continued to climb and now sit near record highs. Executives at food companies and grocers have taken note, with some calling the beef situation a "big challenge."

Here are the beefed-up numbers: Ground beef averaged about $6.70 per pound in March, about 14% higher than the year prior, according to Bureau of Labor Statistics. Uncooked beef steaks were about $12.73, about 16% higher. USDA Choice sirloin saw the biggest year-over-year jump, of more than 18%, to $14.12. Meanwhile, feeder cattle futures for April—contracts between buyers and sellers of weaned calves destined for slaughter—hit fresh highs earlier this week.

The prices may bite, but the American eater may not change meal plans. Though historically thin cattle herds and industry dynamics have pushed prices ever higher, demand for red meat has continued unabated. That consumers aren't showing signs of sticker shock can be explained by the incremental rise in personal income and wages, according to Dr. Michael Swanson, Chief Economist at the Wells Fargo Agri-Food Institute.

Relative to wages, Swanson told Investopedia, "it's not a great price, but it's not a terrible price either."

WHY THIS MATTERS TO YOU

If beef is what's for dinner, it's likely going to be more expensive this year than last, and prices aren't likely to go lower any time soon.

Supply is one reason beef prices have gotten so high: U.S. cattle herds have hit a 75-year low. Cattle cycles typically last a decade, expanding at the start when producers rebuild herds and contracting during the slaughter phase. However, the current cattle cycle—now in its 13th year and its eighth year of contraction—has been stretched by years of drought and declining pasture conditions, combined with higher feed prices, that have pushed farmers to sell their cattle for slaughter and slashed inventories to multi-decade troughs.

Higher prices have't helped. Operators have in recent years chosen to take their cows to market rather than retain them, which comes with risk given high feed prices and generally higher operating costs. "They look and they say to themselves, 'Wow, I can just sell that effort today and pick up another $2,500 to $3,000.'" Swanson said. "The prices are so good, it's really a pretty expensive proposition to start retaining heifers for future revenue two or three years down the line."

That has put some food companies in a tough spot. "One of the issues we've had is—and particularly over the last couple of years as it relates to beef—is volume," Donnie King, chief of Tyson Foods (TSN) said in February, per transcripts provided by AlphaSense. The food company's COO Devin Cole observed "early signs of a herd rebuild" but noted that one might also mean "less availability in the short-term" as some cattle are held back from customers.

Meanwhile, protein-hungry consumers keep buying. The Retail All Fresh Beef Demand Index, which tracks consumption, is the highest it has ever been since 2000, according to the Livestock Marketing Information Center's latest report. Costco's (COST) fiscal second quarter saw "strong growth" in sales of premium cuts of beef as well as lower-cost ground.

When the cycle will break remains to be seen, but Swanson views an inevitable change in trend as good reason for cow-calf operators to hedge their businesses now. Dairy operators, who milk some 9.6 million cows, have started to take share from cow-calf operators by cross-breeding to produce for beef production—"a whole new source of feeder cattle," he said. Imports, which have increased in recent years, may also put downward pressure on prices.

History suggests that if prices turn, they could fall substantially. In 2016 prices dropped to $163 on average per hundredweight from $263 the year prior, according to Swanson. In 2025, prices were around $400.

If meatpackers and wholesalers start to "step away from the rail," effectively lowering bids for cattle, the market could turn, according to Swanson. "This is a market that always stays on the bleeding edge of what cattle are worth."

Washington, D.C., New Orleans and Springfield, IL are the top cities for recent college graduates.
Credit: Aron Smith/Jackson State University via Getty Images

KEY TAKEAWAYS

• Washington, D.C., New Orleans, and Springfield, Ill., rank as the best cities for recent graduates based on job opportunities, salaries, and housing affordability.
• Rising gas prices and economic uncertainty are making it harder for recent graduates to find entry-level jobs.
• Many workers also say affordable housing greatly affects their quality of life, making cities with cheaper housing key for younger workers.

College students graduating this year may want to relocate to these cities to increase their chances of earning a good income and becoming homeowners.

A recent report from Glassdoor and Redfin ranks the top big, mid-sized, and small United States cities for recent college graduates. Washington, D.C., New Orleans and Springfield, Ill., ranked as the top cities in the respective categories.

In general, the top-ranked cities offer recent graduates higher starting salaries and stronger job markets. These cities also had more affordable starter home prices and lower monthly rents, helping recent graduates afford a down payment sooner.

Why This Matters

Many recent college graduates must also deal with repaying the student loans they took out for their education. Securing a job with a good starting income and finding affordable housing can be key to paying down student debt early.

The Current Labor Market Is Not Treating Young Workers Well

Recent college graduates entering the labor market have struggled to find entry-level positions. Many companies have held off on hiring due to economic uncertainty and AI taking over some entry-level position tasks.

To add to this generation's early-career unemployment troubles, the recent spike in gas prices is most likely to negatively impact jobs in retail and leisure, according to a recent Bank of America report. Discretionary spending in these sectors is the first to slow when inflation rises, and Generation Z is more likely than older generations to have jobs in these fields.

Salary is important to recent graduates, with almost 90% of workers aged 20 to 29 saying they would relocate for a job if the pay is enough to support their "ideal lifestyle," according to a Glassdoor poll.

Santa Fe, N.M., ranked highest overall by Glassdoor and Redfin for average annual wages for early-career workers at $81,848.

However, salaries and work opportunities weren't the only factors workers said affected their quality of life. Almost two in 10 workers said in a recent Glassdoor poll that housing affordability had the greatest impact on their lives.

Of all the cities ranked by Glassroom and Redfin, Springfield, Ill., has the lowest prices for a typical starter home, at $128,000. It also took workers in this area about two years and three months to save for a down payment for a typical home, the shortest time period of any other city.

The Nasdaq climbed to a fresh record on Wednesday as Iran war jitters eased and attention reverted to AI.
Credit: Michael Nagle / Bloomberg via Getty Images

Key Takeaways

• The Nasdaq closed at a record high on Wednesday as investors looked past uncertainty surrounding the war in Iran to focus on the likelihood of a strong first-quarter earnings season for tech companies.
• Investors will be eyeing the results of software companies, memory chip makers, and major cloud providers for clarity on the trajectory of AI spending.

The AI trade is back on.

The Nasdaq Composite, after more than five months of searching for direction, set a new record high on Wednesday as stocks continued their risk-on rally. The index rose more than 1.5% on Wednesday to close above 24000 for the first time and surpass its late-October record. 

Even before Wednesday, tech was the best-performing sector since the war in Iran began. Tech stocks rose nearly 6% from late February to Tuesday’s close, more than quadrupling the return of the S&P 500 over that period. 

Why This Is Important

War in Iran and the resulting oil shock appeared to imperil the 3-year-old bull market that's largely been fueled by spending on artificial intelligence. With investors increasingly confident that the war is winding down, optimism has revived the tech trade.

And investors appear confident that the war in Iran won't derail a U.S. economy still riding the tailwinds of AI spending— despite continued uncertainty surrounding peace talks and a reopening of the Strait of Hormuz, factors that until recently were clear headwinds for stocks.

“The market was looking for a reason to go up and got one as soon as there were signs a deal could still be in play,” says Shay Boloor, chief market strategist at Futurum Equities, of this week’s rally. “The fact that the Nasdaq is back at all time highs tells you investors are still willing to look through geopolitical noise when the earnings engine underneath the AI cycle remains this strong."

AI spending is expected to continue to fuel the tech sector’s growth this year, especially at the firms designing and making the semiconductors used to train and run AI models. Tech earnings estimates have increased by 6% since the start of the war, and analysts forecast the sector grew earnings by 44% last quarter, according to Jeff Buchbinder, chief equity strategist at LPL Financial. “Earnings were expected to grow at a strong clip, but analysts again underestimated the sector’s earnings power,” wrote Buchbinder. 

Tech earnings estimates rose last month, but share prices prices fell amid concerns about the war in Iran and its economic impact. As a result, once pricey stocks were trading at attractive valuations when the announcement of a ceasefire in Iran lifted hopes for an end to the conflict. Even after two weeks of gains, the tech sector currently trades at an 8% premium to the S&P 500—“about in line with the long-term average and still attractive given the strong outlook for earnings growth and robust profit margins,” according to Buchbinder. 

The tech sector is “rich in idiosyncratic opportunity” after last month’s slump, according to Bank of America analyst Savita Subramanian. Investors last month sold tech simply because it was tech, Subramanian wrote in a note on Thursday, and likely threw some babies out with the bathwater—meaning selective investors could pick up shares at appealing prices. 

First-quarter earnings season, which will hit its stride later this month, could help investors identify more babies. Software companies may be among them: Their stocks have been hit hard by concerns that the rise of AI agents, capable of whipping up functional code in the blink of an eye, will rewrite the economics of the industry. But Morgan Stanley analysts on Thursday noted that conversations with industry contacts “point to a healthy demand environment in Q1 and cautious optimism for 2026” for infrastructure software providers like Datadog (DDOG) and Palantir (PLTR), who they say are likely benefiting from AI adoption.

Investors will be looking to Big Tech’s capital expenditures to confirm that war hasn’t sapped the data center buildout of its momentum. They’ll also be eyeing the results of memory chip and data storage device makers, whose shares have soared amid a supply shortage exacerbated by booming data center demand. 

Earnings season could also revive the AI bubble debate that reached a fever pitch last year before subsiding amid the war. Investors worried about speculative frenzy got another worrying signal this week: shares of defunct shoe maker Allbirds (BIRD) soared nearly 600% on Wednesday after the company announced plans to become an AI infrastructure company. 

“When a company that sold its shoe brand for $39 million … can add $127 million of market capitalization in a single trading session simply by announcing a pivot to GPU leasing, the market is not pricing risk. It is pricing narrative,” said Mark Malek, chief investment officer at Siebert Financial. “It is pricing the word ‘AI’ the same way it once priced the word ‘blockchain’ and before that the suffix ‘.com.’,” he added, referring to the Dotcom Bubble of the 1990s.

Spirit Airlines filed for bankruptcy for the second time in less than a year last August.
Credit: Kevin Carter / Getty Images

Key Takeaways

• Spirit Airlines could decide to liquidate as soon as this week, as the discount airline faces soaring fuel costs caused by the Iran war, Bloomberg reported.
• The airline said earlier this year that it had reached a deal with its creditors, and planned to exit the bankruptcy process this summer.

Americans could soon have one fewer option for discount air travel.

Spirit Airlines could be headed towards a liquidation as surging fuel costs caused by the Iran war are pressuring the company's finances, Bloomberg reported Wednesday night. The airline has been operating while navigating the Chapter 11 bankruptcy process, but could make the decision to liquidate as soon as this week, per Bloomberg.

Spirit filed for bankruptcy last August, its second time doing so in under a year, after exiting its first bankruptcy restructuring months earlier in March. Spirit had reached a deal with its creditors to cut costs and eliminate billions in dollars of debt and said last month that it expected to exit the Chapter 11 process this summer.

Spirit Airlines did not immediately respond to a request for comment on the report.

Why This Matters

Analysts have said Spirit halting its operations could benefit other discount airlines such as Frontier, as former Spirit customers would likely switch to a new carrier. Reduced competition, however, could put upward pressure on airfares at a time when rising fuel prices are already leading airlines to pass costs on to consumers.

Spirit's troubles before its first bankruptcy included a failed merger with JetBlue (JBLU) that was called off in March 2024 after a judge blocked it on antitrust grounds. Spirit also rejected offers from fellow discount airline Frontier Group (ULCC) while undergoing its first bankruptcy process last year.

Frontier shares surged Thursday morning on the news of Spirit's potential liquidation, rising more than 7% to a six-week high.

The surge in fuel prices resulting from the Iran war has prompted airlines across the industry to raise ticket prices and fees recently. Travel demand has remained strong, but higher fuel costs weigh on the profit margins of airlines.

Federal Reserve officials are considering whether to cut their influential interest rate or not.
Credit: Al Drago / Getty Images

KEY TAKEAWAYS

• The Federal Reserve may still cut interest rates later this year if inflation risks from higher oil prices prove temporary.
• Rising unemployment and weaker consumer spending could push the Fed to prioritize economic growth over inflation concerns.

Don’t rule out rate cuts from the Federal Reserve just yet, several analysts say.

Yes, there is a big risk that the Iran war will persist and the spike in oil prices will prove longer-lasting. That could prompt just the type of inflation surge the Fed fights with higher interest rates, the playbook the Fed dusted off in 2022.

But there’s also a likelihood that the conflict will ease soon, leading to only a temporary impact on prices. If so, the Fed could resume the rate cuts that markets had been expecting before the war started.

“The uncertainty has reinforced the Fed’s wait-and-see stance for now, but we still anticipate that policymakers will lower interest rates later this year,” wrote Michael Pearce, chief U.S. economist at Oxford Economics.

Why This Matters to You

Rate cut expectations shape borrowing costs and investment decisions for consumers and investors. A shift could affect mortgages, markets, and job growth.

Those rate cuts are likely to be delayed until later in the year, as Fed officials wait for clear signs that the inflation risks are only temporary. Helping the case for cuts is the risk that weaker economic growth, driven by higher oil prices, could lead to an uptick in layoffs, undercutting the Fed’s goal of preventing rising unemployment.

The unemployment rate could rise to 4.6% this year, according to Goldman Sachs economist Jessica Rindels. While not a dramatic rise, that’d still be up from 4.3% in March and a far cry from less than 4% of two years ago.

“Past oil shocks have tended to reduce employment the most in discretionary spending sectors like leisure and hospitality, where demand is most sensitive to the hit to disposable income,” Rindels wrote.

The Fed is “firmly in wait-and-see mode for now,” Rindels wrote, but the uptick in unemployment should make a “compelling case” for rate cuts in September and December.

Markets don’t seem to be in that camp yet. Traders see a 68% chance that the Fed will keep rates unchanged all year, according to the CME Group’s FedWatch tool, which uses futures market pricing to determine Fed probabilities. 

But the risk of hikes has gone down sharply following the ceasefire announced last week. Instead, rate cuts seem to be back on the table, with traders seeing a 31% chance of a rate cut by the end of the year.

Below are two factors that could lead to rate cuts.

Cooler Core Prices

It seems hard to believe as gas prices surpass $4 a gallon in some states, all while prices on fertilizer, aluminum, helium and other commodities rise sharply. 

But the inflation hit may end up being temporary, allowing the Fed to proceed with rate cuts if the tensions simmer.

Consumers are feeling the hit nonetheless. The consumer price index posted its largest monthly increase since 2022 in March, according to the latest inflation data. The CPI rose at an annual pace of 3.3% in March, up from 2.4% in February.

But “core” prices, which strip out volatile food and energy costs, stayed relatively tame and pointed to fewer signs of broader price pressures. Those rose at a pace of 2.6%, a bit softer than analysts expected and closer to the Fed’s 2% target. 

The impact of last year’s tariffs is also continuing to fade.

“Underneath the surface, core inflation continues to move in the right direction,” wrote Adam Schickling, U.S. economist at Vanguard. “That distinction matters for the Fed, which is far more focused on persistent pressures like labor‑driven services inflation than short‑term swings in oil prices.”

Consumers’ beliefs about future inflation will be critical. Not surprisingly, short-term inflation expectations have risen sharply, but longer-term ones appear to be mostly stable, wrote Marc Giannoni, chief U.S. economist at Barclays.

“We maintain our expectation that the committee will regain confidence that inflation is moderating and returning toward the 2% goal, and hence will find it appropriate to cut rates,” he wrote.

He expects the Fed will cut rates just once, in September, though he noted higher inflation could delay that.

Softer Job Market

Giannoni and other analysts see a risk that uncertainty—and high gas prices—could slow the U.S. economy’s momentum.

Consumer spending didn’t start the year off particularly strong, Giannoni noted. Real personal consumption expenditures grew by just 0.1% in February compared to a month earlier, according to Bureau of Economic Analysis data released this month.

Though the ceasefire may have lifted their spirits, a University of Michigan index of consumer sentiment plunged to an all-time low in the latest release.

Business owners also painted a “dim picture” in a recent survey from the National Federation of Independent Business, wrote Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. The headline NFIB sentiment reading fell to an eleven-month low, he noted.

Encouragingly for inflation, the NFIB survey didn’t point to any clear signs that businesses are preparing for major price hikes, either, Allen wrote.

“We think consumer demand and the labor market are too weak for major second-round price effects from the energy shock to be a base-case scenario,” he wrote.

The initial shock from oil prices jumping is “offsetting the boost from fiscal stimulus this year,” Oxford Economics’ Pearce wrote. That raises the risk of slower consumer spending prompting businesses to cut jobs or slow their pace of hiring, he wrote.

“We expect the unemployment rate to remain stable, but a deterioration in conditions would signal a bigger downturn in the economy, which the Federal Reserve is eager to guard against,” he wrote.

The Fed has two jobs: ensure stable inflation and maximum employment. And the Fed, Pearce wrote, is likely to be “more sensitive to the downside risks to the labor market than the temporary spike in inflation due to higher oil prices.”