Joe Terranova Says “Inflation Lost” on Election Night. What That Means for Energy Stocks
One CNBC trader says the fever has broken in energy and oil won't see $100 again. A rival panelist warns of a black swan that could flip the trade overnight, and income investors holding Exxon and Chevron have the most…
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Joe Terranova made a direct call on oil on CNBC’s Halftime Report on Wednesday, the morning after Democrats swept the midterm elections: “I think that inflation lost last night. I think inflation lost and we’re seeing it reflected today in the price of energy. I think the fever has broken in the energy trade. I would be very surprised to see oil spike back up to $100.”
Energy has led the market for most of 2026. If Terranova is right, the main force behind that run is fading.
Why Terranova Thinks the Energy Fever Broke
His argument goes like this. Oil has carried a war premium for months because of the U.S. conflict with Iran. The Wall Street Journal reported that oil futures fell Wednesday after the Democratic sweep of Congress raised market expectations for a quick settlement to the Middle East conflict. Vice President JD Vance linked his party’s losses to the conflict, posting “The reason we lost is the war.” Take away the war premium, and you take away one of the biggest inputs to inflation.
How Oil and Energy Stocks Traded Into the Vote
Oil had already started falling before polls closed. WTI crude spot prices peaked at $110.01 on October 19, then slid from $107.56 on October 30 to $99.64 on November 3, down $3.73 from a week earlier.
Energy stocks fell along with oil. The Energy Select Sector SPDR Fund (NYSEARCA:XLE) dropped 7.1% over the past week to $63.59. It is still up 45.04% year to date. Exxon Mobil (NYSE:XOM | XOM Price Prediction) lost 7.65% on the week to $169.27 and remains up 40.66% for 2026. Chevron (NYSE:CVX) fell 6.26% to $216.96, which still leaves it up 42.35% this year. So far the pullback has taken back only a small part of the year’s gains.
What Could Prove Him Wrong
Oil can spike quickly. WTI went from $85.23 on September 25 to $99.37 on September 28. It also closed at $100.06 just two sessions before Terranova spoke.
Steve Weiss pushed back on the same show: “I think there’s more than a reasonable probability that Trump does something aggressive with Iran so he can call that a victory, which he’s in sorely need of. That puts a damper on the inflation story, the rate story. A black swan event that’s likely to happen.”
Supply policy is the other risk. OPEC+ agreed to keep November production targets steady and indicated that more changes are unlikely before next year. If peace talks stall, producers have shown no rush to add barrels.
What Retirement Investors Holding Energy Dividends Should Know
The third-quarter numbers show how much the majors earned at high prices. Chevron reported adjusted EPS of $5.28, beating the $4.83 consensus. Brent averaged $97 per barrel, up from $69 a year ago. The stock yields 2.9% on a quarterly dividend of $1.78 and trades at about 36 times trailing earnings.
Exxon posted adjusted EPS of $4.23, beating estimates of $3.98, mostly on stronger refining margins. Its third-quarter earnings release also announced a $20 billion buyback target for 2027 and a $1.07 fourth-quarter dividend, the company’s 44th consecutive year of increases. Exxon yields 2.38% at about 25 times earnings. Management points to $16.9 billion in structural cost savings since 2019 as proof that its earnings power will hold up if prices fall.
For income investors, cheaper oil puts buybacks at risk first. Dividends come later. Both companies have long records of paying through downturns, but valuations of 25x and 36x leave little room for disappointment if earnings fall back toward 2025 levels. The warning signs that a fat energy yield is about to get cut tend to show up in the financials long before the press release (we walked through seven of them in a free dividend trap guide).
Signals to Track Before the Next Dividend Checks
- Whether WTI stays below Terranova’s $100 line as U.S.-Iran talks move forward.
- OPEC+ policy signals heading into 2027.
- Chevron’s quarterly sensitivities and guidance on its investor relations site, which show how much earnings change for each move in crude prices.
- Upcoming payments: Exxon’s dividend goes to holders of record on November 16, and Chevron’s on November 18. Both are paid December 10.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
