What Happened?
A number of stocks fell in the afternoon session after crude oil prices declined sharply as President Trump paused the Strait of Hormuz military escort and cited progress on a U.S.–Iran peace deal.
Oil and gas company profits move almost directly with the price of oil: when oil falls, revenue per barrel falls, and profit margins compress. The Strait of Hormuz is a critical oil chokepoint: approximately 20% of global oil supply passes through it daily.
When the strait is at risk from conflict, oil carries a geopolitical risk premium as extra price built in to reflect supply uncertainty. When that risk eases, the premium disappears and prices return toward the underlying supply-and-demand level. OPEC+, the group of major oil-producing countries, separately announced 188,000 barrels per day of additional supply starting June 2026, which added to the downward price pressure independent of the peace deal.
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:
- Infrastructure company Tenaris (NYSE:TEN) fell 3.2%. Is now the time to buy Tenaris? Access our full analysis report here, it’s free.
- Upstream Natural Gas E&P company CNX Resources (NYSE:CNX) fell 3.3%. Is now the time to buy CNX Resources? Access our full analysis report here, it’s free.
Zooming In On CNX Resources (CNX)
CNX Resources’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 3% on the news that the company confirmed its convertible notes would mature and convert into approximately 12 million new shares, and also lowered its full-year financial outlook.
The conversion of these notes into stock increases the total number of shares available, which can reduce the value of existing shares. This news overshadowed an otherwise strong first-quarter earnings report, where operating earnings surpassed estimates.
Despite the earnings beat, CNX Resources reduced its 2026 free cash flow expectation to approximately $525 million from a prior forecast of $550 million. The company also trimmed its adjusted EBITDAX guidance, a measure of operational profitability. Investors reacted to the combination of future share dilution and the more cautious financial forecast for the remainder of the year.
CNX Resources is flat since the beginning of the year, and at $36.54 per share, it is trading 14.2% below its 52-week high of $42.61 from March 2026. Investors who bought $1,000 worth of CNX Resources’s shares 5 years ago would now be looking at an investment worth $2,669.
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