Oil prices have jumped since the conflict began in Iran. Brent is close to $115 a barrel and U.S. WTI is well over $100. Fuel for cars and planes has risen even faster.
RBOB gasoline futures moved from $2.89 on April 17 to $3.64 today. By June, the price will still be about $3.50, which means drivers could see $4.45 per gallon at the pump as summer travel starts.
Markets Keep Going Despite Higher Energy Costs
Just a month ago, rising fuel prices would have scared many investors. Instead, the S&P 500 is near record highs and small‑cap stocks are holding strong. Even overseas markets, like Japan’s Nikkei, are doing well.
Higher gas prices will hurt people who earn modest wages, unless there is a big change in Middle‑East policy. Still, some consumer companies are showing strength.
Why Earnings Reactions Matter More Than the Numbers
When a company reports earnings, the market’s reaction often matters more than the actual figures. Earnings data reflects the past quarter, while investors are always looking ahead. Prices move first; earnings follow.
Overall, consumer‑focused stocks have been weak. I compare the Invesco S&P 500 Equal‑Weight Consumer Discretionary ETF (RSPD) to the broad S&P 500 (SPY). The RSPD/SPY ratio is now at its lowest point since 2000.
Two bright spots this week are Visa and Starbucks. Both companies released first‑quarter results and beat analysts’ expectations. Their stocks rose about 5% the next morning.
Visa Shows a Small Bounce
Visa’s shares fell 8% year‑to‑date before the earnings release, lagging the S&P 500. After the report, the stock jumped, its best post‑earnings move in three years. It is trading around $325.
The stock is still below its 200‑day moving average, which it hasn’t crossed since early January. Support sits just under $300, while resistance is near $355.
Starbucks Holds Up Well
Starbucks also beat estimates. The stock traded at $102 before the market opened on April 29 and is close to its highest level since March 2025. If it closes near today’s price, it could set a new 52‑week high.
After a long decline since last year, Starbucks is now in a long‑term consolidation pattern. Moving up into the mid‑$110 range looks possible.
What This Means for the Consumer Story
Visa and Starbucks are not pure consumer plays. Visa faces challenges from AI and crypto, while Starbucks is still turning around its business. Still, the positive price reactions give a small sign of hope.
More retail earnings will be released in May, which will add detail to the overall picture.
Looking Beyond Consumer Spending
Even though the consumer sector is weak, other forces such as technology trends keep the market moving higher. The S&P 500 and many international indexes are still finding new highs despite the slump in consumer discretionary stocks.
Bottom Line
Consumer confidence is low while the broader market stays near record levels. Visa and Starbucks posted solid Q1 numbers and their stocks reacted positively. Still, most consumer‑focused stocks remain depressed, and higher oil prices could push gas costs past $4.50 per gallon.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Always consider your personal situation and consult a professional before making investment decisions.
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