Oil Surges +13% After President Trump’s Iran War Address

Crude oil futures (/CL) are spiking and remain elevated above 13% as traders continue to digest President Trump’s speech about the Iran War last night. Trump said the U.S. military operation was “very close” to ending but also that major strikes on Iran are still in the works. However, Iranian representatives have repeatedly denied that they have asked for a ceasefire and the critical oil route chokepoint of the Strait of Hormuz remains closed to most commercial vessels.

The reaction for markets was severe as the final trading day of the holiday-shortened week dawns, with S&P 500 futures (/ES) sinking about -1.5% and the small-cap focused Russell 2000 futures (/RTY) falling roughly -1.9%. Volatility is also on the move as VIX futures (/VX) surged up to 26.50 from the previous close of 24.35.

Energy traders may be watching the State Street Energy Sector ETF (XLE), which saw a -7.1% plunge as of yesterday’s close after hitting its all-time highs of 63.46 on Monday. This fund is dominated by two companies: Exxon Mobil (XOM) at about 23.4% and Chevron (CVX) at about 17.2%. Other major names include ConocoPhillips (COP), EOG Resources (EOG), SLB (SLB), and Valero (VLO).

The technical picture for XLE shows a chart with two distinct phases. The first was a stabilization and subsequent rangebound period after the major tariff announcements in April and concluding near the end of 2025. The current 2026 trading year is a stark change, with the fund shooting up almost +32% year-to-date as of yesterday’s close.

Yesterday’s price action brought a close of 58.97, which was notable because it was slightly below a trendline beginning near the January lows and also because this is exactly where the 21-day Exponential Moving Average ended up as well. However, despite this break below this support confluence, price held on above the 58 level which represents an old high from March 2 and was also around where price hit lows on March 20. This gives traders a specific area to watch, as old resistance areas can often come back into focus as new support.

Momentum also took a hit, with the Relative Strength Index (RSI) falling out of the overbought area and giving a bearish signal in tandem with this indicator breaking below its own upward trendline. Traders should be on the lookout for the RSI to climb back into overbought territory – the threshold of 70 – for another bullish signal.

The options market for the XLE also reveals some interesting tidbits. The Apr. 17 monthly expiration shows a potential expected move of about 5.3%, which closely aligns with the previous all-time highs and suggests market participants are not banking on a breakout into new highs of 63.46. Going forward, the May 15 monthly expiration shows a range of about +/- 8.4%, which could take price above the 65 level.

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