The Biggest Things Driving the S&P 500 Higher Despite $103 Oil Today

U.S. equity futures are pointing higher again Tuesday morning, with both S&P 500 and Dow contracts in positive territory, even as Brent crude climbs above $103 a barrel and geopolitical tensions in the Middle East intensify. The resilience is notable. While Asian markets like South Korea’s Kospi have fallen sharply in March, the S&P 500 has held up far better, suggesting investors are still betting on domestic earnings strength over global macro fears.

Oil Nearing $100 Is Not Stopping the Rally

Fresh strikes on the Majnoon oil field in Iraq and a gas field in the UAE have pushed Brent above $103, while the Strait of Hormuz remains largely paralyzed. Only three tankers have crossed since the weekend, compared to more than 100 transits in peacetime.

WTI crude, which was at $94.65 as of March 9, has risen sharply amid the supply disruption. The supply disruption is severe enough that ING has warned prolonged Strait of Hormuz disruptions could push oil to record highs surpassing 2008 levels.

The energy sector is one of the clearest beneficiaries of the supply shock. Exxon Mobil (NYSE:XOM | XOM Price Prediction) surged past $157 with Barclays and Piper Sandler raising price targets as analysts at Barclays and Piper Sandler raised their price targets, reflecting expectations that sustained high oil prices will translate directly into earnings upside for integrated majors. Occidental Petroleum (NYSE:OXY) hit a one-year high of $59.15 on similar analyst upgrades. The flip side of that trade is visible in airlines: Delta Air Lines (NYSE:DAL) faces margin pressure from rising jet fuel costs, though strong travel demand has allowed it to raise its first-quarter revenue outlook, cushioning some of the margin pressure.

Why the Broader Market Is Holding Up

The resilience comes down to earnings expectations. According to Ed Yardeni of Yardeni Research, Wall Street analysts have continued raising earnings forecasts for 2026 and 2027, with S&P 500 aggregate forward earnings reaching a record $328.80 per share. That momentum has helped compress the forward price-to-earnings ratio to around 20, down from 22 in late January, making valuations look more reasonable even as macro risks pile up.

The VIX tells a more cautious story. The fear gauge sits at 27.19, up 54% from a month ago, placing it firmly in elevated uncertainty territory. That is well below the panic peak of 52 hit in April 2025, but high enough to signal that options markets are pricing in real risk. The Fed meets Wednesday and is expected to hold rates steady, with investors focused on what Chair Powell says about oil-driven inflation.

Small-caps are lagging. The Russell 2000 is down 5.3% over the past month, reflecting how higher energy costs and borrowing rates hit domestically focused companies harder than the large-cap multinationals dominating the S&P 500 and Dow.