Monday’s Dip-Buy Met an Oil Shock, and Tuesday Looks Like the Real Test

Monday’s close looked calmer than the headlines deserved. U.S. stocks clawed back early losses and finished narrowly mixed, with tech and defense strength helping offset broader weakness. The Dow slipped 0.15% , the S&P 500 was basically flat (+0.04%), and the Nasdaq gained…

Monday’s close looked calmer than the headlines deserved. U.S. stocks clawed back early losses and finished narrowly mixed, with tech and defense strength helping offset broader weakness. The Dow slipped 0.15%, the S&P 500 was basically flat (+0.04%), and the Nasdaq gained 0.36%.

But the more important part of Monday was what changed underneath the equity tape: energy and rates. Oil settled sharply higher after the weekend escalation, with U.S. crude up about 6% and Brent up about 6.7%. Bond markets reacted too, with the 10-year yield logging one of its biggest daily moves in months, rising about 9 basis points to roughly 4.05% as inflation fears reasserted themselves through the oil channel.

That sets up today’s session in plain terms. If Monday was the market saying “this might stay contained,” Tuesday is the market asking “what if it doesn’t?” Overnight and into the morning, Reuters reported stock futures sliding as investors focused on oil-driven inflation risk, higher shipping costs, and the prospect that rate cuts get pushed out.

Stock of Interest Today: TeraWulf (WULF)

TeraWulf is entering this week as one of the cleanest public-market “pivot tests,” a former Bitcoin miner trying to turn power access into credit-backed high-performance computing infrastructure. The company’s latest update emphasized the scale of the shift: 522 critical IT MW under long-term data center lease agreements and over $12.8B of contracted revenue tied to those commitments.

The headline setup is easy to understand. Management is pushing the narrative away from crypto volatility and toward long-dated, contract-driven visibility. On the earnings call, the company framed 2025 as a transition year where Bitcoin revenue still mattered, but the mix is expected to keep shifting as additional buildings come online and HPC leasing ramps.

The tension is that the GAAP optics are still loud. The call highlighted a $429.8M non-cash loss from changes in the fair value of warrant and derivative liabilities, predominantly tied to Google’s warrant, plus a much larger GAAP net loss for 2025. Management’s point was blunt: it is non-cash, and it does not change liquidity.

Where investors are leaning in is profitability and funding. The company described HPC segment profit margin at roughly 42% as reported for 2025, and roughly 77% after adjustments for tenant fit-out revenue and pre-revenue costs, with long-term guidance around 85% as utilization stabilizes. It also ended 2025 with about $3.7B in cash, cash equivalents, and restricted cash, which is the reason the market is willing to underwrite buildout risk more than it would for a thinner balance sheet story.

Then there is valuation framing, which is increasingly “megawatts as the unit of account.” One analysis put TeraWulf at roughly $15.1M per contracted MW, described as a meaningful discount versus CoreWeave on an EV-per-megawatt basis, implying that clean execution could expand the multiple over time.

Current price: $16.02Analyst target: $20.69

Five Market Themes to Watch

Monday’s session looked like a tug-of-war between “buy the dip” instincts and an energy shock that keeps rewriting the inflation script. Today’s setup pushes that tension forward: higher oil and higher shipping costs are forcing investors to think about duration, not just headlines, and bonds are reacting as if inflation risk is back in the driver’s seat.

Here are five themes worth tracking through the rest of today and into the week, with the practical “so what?” for markets.

1) Conflict duration debate: Positioning is splitting by region

Some investors are treating this as a short campaign, while others are focused on tail-risk outcomes that keep the risk premium embedded. A Barron’s note flagged that Jefferies does not expect a long-drawn war, but still expects it to run at least 2–3 weeks, which is long enough to matter for shipping, insurance, and inflation psychology.

What to watch next: Concrete indicators that the timeline is shortening or stretching. The market will react more to evidence of persistent disruption than to day-by-day rhetoric.

2) Oil and inflation trigger risk: The mechanism matters more than the headline

Oil is reacting because the Strait of Hormuz is not a symbolic chokepoint. The U.S. Energy Information Administration estimates that in 2024, flows through Hormuz averaged about 20 million barrels per day, roughly 20% of global petroleum liquids consumption, and about 20% of global LNG trade also transited the strait.

What to watch next: Persistence, not spikes. If prices stay elevated in the forward curve, the “inflation impulse” becomes a real input into rate expectations, and that changes how equities get valued.

3) The Treasury problem: Safe-haven demand is competing with inflation math

Monday’s bond move was the warning. The 10-year yield surged about 9 basis points to roughly 4.05%, and yields pushed higher again into Tuesday, with market summaries describing the move as driven by oil and uncertainty rather than growth optimism.

What to watch next: Whether yields keep rising even when equities are under pressure. That pattern tightens conditions faster and usually broadens the selloff beyond the obvious “energy up, travel down” trades.

4) “Virtually unlimited supply” messaging: It raises the ceiling on duration risk

Public messaging can change the market’s range of outcomes. Trump’s post said the U.S. has a “virtually unlimited supply” of certain munitions and that wars can be fought “forever” using those supplies. Even if investors discount rhetoric, statements like this expand the plausible duration set, which feeds straight into energy risk premia.

What to watch next: Whether policy posture and allied constraints start to align with the “open-ended” framing. Markets care less about tone and more about whether commitment signals are rising.

5) Miner-to-HPC pivots: “Power plus contracts” is becoming its own category

The market is increasingly valuing AI infrastructure around delivered capacity, contract quality, and margin durability. TeraWulf’s pitch is explicitly that its contracted HPC platform offers multi-year visibility and a margin structure that looks very different from mining.

What to watch next: Milestones. In this tape, the market is paying less for ambition and more for on-time delivery, financing clarity, and whether margin claims show up consistently as revenue scales.

Bottom Line

Monday’s flat-ish close was misleading. The real shift was oil and rates, and that is what can make today’s market feel heavier even if the equity headlines look similar. If energy stays elevated and yields keep drifting higher, risk appetite typically narrows and stock performance starts to depend more on funding strength, contract visibility, and margin resilience than on broad “growth” narratives.

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