Oil & Stocks: A History of Ups & Downs

by

Rocket Coins

Now, I’ve been watchin’ Wall Street for a spell, and let me tell ya, it’s a peculiar beast. For the last seven years or so, it’s been actin’ like a pup with a new bone – chasin’ gains with a reckless abandon. The S&P 500, bless its heart, has been climbin’ like a monkey up a silk curtain, gainin’ a good 16% each year, save for one little stumble in ’22. And the Dow Jones Industrial Average and the nimble Nasdaq Composite? They’ve been dancin’ a jig right along with it, settin’ new records like a fella countin’ pennies.

But history, you see, is a stern schoolmaster. It teaches us that nothin’ goes straight up, not even a fool’s hopes. And lately, Wall Street’s been lookin’ a mite peaked. Since the ruckus started over in Iran and Israel, the market’s been takin’ a bit of a swoon, and, wouldn’t you know it, the price of crude oil has decided to go on a spree.

Now, some folks get all flustered by these things, but I’ve been watchin’ the game long enough to know that sometimes, a bit of trouble is just what the doctor ordered. Seems that every time the oil wells start a-spewin’ and the price takes a jump, the stock market, contrary as a mule, tends to perk right up.

Patience & Petroleum: A Curious Connection

The trouble, as near as I can figure, is a disruption in the supply of that black gold. Iran, they say, has practically shut down the Strait of Hormuz, which is where a good 20% of the world’s oil takes its journey. When the supply gets pinched, well, that old law of supply and demand kicks in, and the price, naturally, goes a-climbin’. And climb it has!

West Texas Intermediate and Brent crude, they’re both lookin’ mighty proud these days. Folks are frettin’ about higher energy prices, inflation gettin’ a tickle, and the Federal Reserve considerin’ a little tightening of the screws. But I’ve noticed a pattern, a curious little habit of the market. Every time oil prices decide to take a leap, investors, bless their optimistic hearts, tend to see it as a buyin’ opportunity.

Old Phil Rosen, a sharp fella over at Opening Bell Daily, posted somethin’ on that X platform (used to be Twitter, you know) that caught my eye. He pointed out that since 1986, crude oil prices have jumped at least 20% in two days on eight occasions. And wouldn’t you know it, six out of seven times, the S&P 500 was higher a year later. On average, it was up a good 24%!

Now, I ain’t one for predictin’ the future – that’s a fool’s errand, if you ask me. But forty years of history is a powerful teacher, and it suggests that stocks might be poised for a bit of a climb over the next year.

Federal Reserve

The Fed: A Wild Card in a Peculiar Game

Now, don’t get me wrong. Historical precedent is all well and good, but the Federal Reserve is a bit of a wildcard. They’ve got their own ideas, and they don’t always pay attention to what happened in the past. Just last month, Core Personal Consumption Expenditures, that fancy measure of inflation the Fed likes to use, hit a 22-month high. With inflation already above their target and oil prices now addin’ fuel to the fire, it seems likely they’ll put those rate cuts on hold.

Usually, a little patience wouldn’t be a bad thing. But this market is already stretched pretty thin, and investors are expectin’ the Fed to keep lowerin’ rates to keep the money flowin’. If oil prices stay high, the Fed might just trump forty years of history and throw a wrench into the works.

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2026-03-20 12:14