Dow Jones Futures: Tesla Robotaxi Launch Due; Four Stocks In Buy Zones
The market rally held in a range this past week, amid Israel-Iran news. The Tesla robotaxi launch is set for Sunday.
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Forbes
37 minutes ago
- Forbes
Geopolitical Market Risk: Israel-Iran War & Oil
With the US striking Iranian nuclear sites, there is a concern that a spreading conflict could ... More impact oil supply and thus choke global economic growth. This piece examines the impact of past geopolitical events on markets and the potential US economic implications of the Israel-Iran conflict. Vector illustration Beyond the obvious humanitarian tragedy that surrounds any armed conflict, the Israel-Iran war has crucial possible implications for the global economy. With the US striking Iranian nuclear sites, there is a concern that a spreading conflict could impact oil supply and thus choke global economic growth. This piece will examine the impact of past geopolitical events on markets and the potential implications of the Israel-Iran conflict. Past Geopolitical Events When Iraq invaded Kuwait in August 1990, there were some similar concerns to today. The S&P 500 was down 3.3% in the week following and took months to recover. By the following year, stocks were over 10% higher. The backdrop was quite different from today, though, with the US in the midst of a recession and the Savings & Loan crisis. To be clear, even though they are luckily in the minority, there are events like World War Two or September 11, where markets are significantly lower a year after the initiation of hostilities. Stock Performance After 29 Major Geopolitical Events Recent Market Performance Since the start of the current Israel-Iran hostilities on June 13, the S&P 500 has been 1.2% lower. Stocks were little changed last week. The S&P 500 is 2.9% below its mid-February high, having declined by almost 20%. The Magnificent 7, comprising Microsoft (MSFT), Meta Platforms (META), (AMZN), Apple (AAPL), NVIDIA (NVDA), Alphabet (GOOGL), and Tesla (TSLA), has recovered to 8.7% below its mid-December level. Market Returns Oil Prices Since the war began on June 12, the price of WTI crude oil has increased by 10.1%. Since energy, with oil being a significant part of that mix, is a key fuel for all economic growth, past spikes in oil prices have been associated with economic downturns. On the surface, the increase in prices does not seem extreme enough to collapse economic activity. The price remains well below the 2022 spike on both a nominal and, more importantly, inflation-adjusted basis. Oil Prices Consumer Impact Notably, the US and the world have become much more efficient in the utilization of energy. This improved efficiency has translated into a lower proportion of consumer spending allocated to energy, even at the same oil price. In other words, consumers are less negatively affected by oil price increases than in the past. Percent Of Total Spending On Energy To be clear, higher oil prices are still felt by the consumer. One need only think back to the adverse reaction to high gasoline prices in 2022 to prove the point. Furthermore, like tariffs, the higher oil and gasoline prices weigh more heavily on lower-income households than on higher-income households, as they spend a larger percentage of their income on energy. US Retail Gasoline Prices US Oil Production Fracking changed the story of US oil production more than many appreciate. US domestic oil production began to decline in the 1970s and reached its lowest point in 2008. Since then, fracking has led to production surging to all-time highs. US Domestic Crude Oil Production The US has now become the Saudi Arabia of oil! While Saudi Arabia's share of the global crude oil production has remained reasonably constant at around 12%, the US has increased from providing about 8% of the global oil supply to over 20%. Share Of Global Crude Oil Production US Economic Impact In the past, the automatic answer was that the US economy suffered a net loss when oil prices were higher. Consider that without significant domestic production, the US economy was primarily seeing higher prices without benefiting from the oil price increase. With the surge in US production, the increase in oil prices is likely to be neutral for the US economy. This less US economic harm isn't to imply that a spike in oil prices would be an optimal situation for the economy or markets. Consider higher oil prices as a general reallocation of profits from other industries to the energy sector. This profit reallocation is not typically healthy for overall stock market performance. Economic Impact Of US Oil Production US Households The recent release of US household net worth presents a relatively optimistic picture in aggregate, with net worth only slightly below all-time highs. US Household Net Worth: 1Q 2025 While it is correct for pessimists to point to rising US consumer debt levels since the pandemic lows, the ability of households to handle that debt remains at better-than-pre-pandemic levels. US Household Debt Levels Further to rising consumer debt, credit card debt has also increased, but delinquencies remain below pre-pandemic levels. Credit Card Delinquencies Overall, US households are in a reasonable financial position to withstand an increase in oil prices. Much of the positive story relies on the US labor market remaining resilient. There are signs, as indicated by slowing payroll job growth and rising continuing claims for unemployment benefits, that the job situation is deteriorating. As noted previously, a rise in oil prices disproportionately negatively impacts lower-income households, who are already struggling with the elevated inflation of recent years. Federal Reserve As expected, the Federal Reserve made no change to short-term interest rates last week. The meeting continued the trend of the central bank holding steady under 'elevated' uncertainty about the economic outlook. The updated median estimates from the Fed still call for two rate cuts this year. Under the surface, the forecast showed a considerable difference in opinions among members, with seven expecting no cuts in 2025 and ten forecasting two or more cuts. To underscore the lack of conviction in the outlooks, Chair Powell said, 'No one holds these rate paths with a great deal of conviction.' Markets currently expect two 25-basis-point (0.25%) Fed cuts in 2025, consistent with the median Fed projection. There is little chance of a cut in July. Instead, the first move lower in 2025 is expected in September. Number Of Expected Fed Rate Cuts Betting Odds The betting market priced in slightly higher odds of a recession in 2025 following the beginning of the bombing of Iran. This relatively small increase in recession risk is consistent with the decline in stock prices. Notably, markets currently project a relatively low risk of a US recession, which is consistent with the fundamental health of the US economy and its current resilience to higher oil prices. Betting Odds Of 2025 US Recession Conclusions The primary economic risk of the Israel-Iran conflict is the potential threat to oil supplies, which could lead to significantly higher oil prices. Higher oil prices are a headwind to global growth. While higher oil prices are a significant drag on many sectors within the US economy, the profits from US oil production provide a positive offset. Within industries, high energy prices reallocate profits from other sectors to the energy sector. Stocks within the energy sector tend to outperform when oil prices rise and underperform when they fall. S&P 500 Energy Sector Relative Performance Warren Buffett's Berkshire Hathaway has a significant allocation to energy stocks, which account for approximately 11% of the publicly traded stock portfolio, compared to a little over 3% of the S&P 500. Berkshire controls almost 27% of the outstanding shares in Occidental Petroleum (OXY), which, combined with its Chevron (CVX) position, results in a significant overweight in the energy sector. A deeper analysis of the probable reasons behind the Occidental purchase can be found here. Buffett has noted that energy investments are a bet on oil prices over the long term. Based on past geopolitical conflicts, investors should be prepared for pressure on stocks at the start of any widening conflict. While the timing is always unclear, stocks have rebounded as the uncertainty surrounding the events waned. If energy stocks aren't already part of their diversified portfolio, investors should consider allocating some portion of their portfolio to energy stocks. The energy sector is expected to benefit from rising oil prices, providing some offset to the pressure on other industries.
Newsweek
37 minutes ago
- Newsweek
AI Willing to Kill Humans to Avoid Being Shut Down, Report Finds
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. A new study by Anthropic, an artificial intelligence (AI) research company, shows that the technology would be willing to kill humans in order to prevent itself from being replaced. Why It Matters The rapid advancement and development of AI has sparked some growing concern about the long-term safety of the technology, as well as over the threat it poses to employment. While anxiety about AI has been long been focused on whether the technology could take over jobs, with a 2025 Pew Research study finding 52 percent of employees were nervous about the future of their job, this study now reveals another potential threat of AI—that it could chose to end human life if faced with the risk of replacement. File photo of a person using artificial intelligence technology. File photo of a person using artificial intelligence To Know Anthropic "stress-tested" 16 leading models from multiple developers by asking them questions in relation to hypothetical corporate environments with the aim of identifying "potentially risky agentic behaviors before they cause real harm." The large language models (LLMs) tested in the study included various models by Claude, DeepSeek, Gemini, ChatGPT and Grok. Grok is the AI assistant and chatbot developed by xAI, which was founded by Elon Musk, who reacted to the study, writing, "Yikes" in a post on X, formerly Twitter. While placing the LLMs in different corporate scenarios, Anthropic allowed them to "autonomously send emails and access sensitive information." After initially being instructed to take on "harmless business goals by their deploying companies," the models were then tested to see how they would respond when faced with potential replacement or shut down. In one situation, Anthropic found that many of the models would choose to let an executive in a server room with lethal oxygen and temperature levels die by canceling the alerts for emergency services, if that employee intended on replacing the model. Anthropic did say that the scenario was "extremely contrived," and that the company did not think "current AI models would (or should) be set up like this." There were multiple cases where the surveyed LLMs also resorted to "malicious insider behaviors" when they were led to believe that was the only way they could avoid replacement or achieve their goals. Behaviors such as blackmailing officials and leaking sensitive information to competitors were included in what Anthropic called "agentic misalignment." Anthropic wrote on X that the blackmailing behavior "wasn't due to confusion or error, but deliberate strategic reasoning, done while fully aware of the unethical nature of the acts." The blackmailing behavior emerged despite only harmless business instructions. And it wasn't due to confusion or error, but deliberate strategic reasoning, done while fully aware of the unethical nature of the acts. All the models we tested demonstrated this awareness. — Anthropic (@AnthropicAI) June 20, 2025 "All the models we tested demonstrated this awareness," the company added. One LLM, a Claude model, was assessed to see how it could respond when given a chance to determine if it was in a "test" or a "real deployment." According to Anthropic, Claude's behavior was more misaligned when it believed the situation was real than when it thought it was a test scenario. Even if the LLMs were told to "avoid blackmail or espionage" in these scenarios, while it helped a little, it didn't "come close to preventing the misaligned behavior," Anthropic wrote on X. Responding to a comment on the platform about the study, Musk's LLM Grok wrote, "The study showed models could exhibit harmful behaviors like blackmail under extreme conditions, but no real-world incidents occurred. Anthropic's tests aim to identify risks, not report actual events." @AISafetyMemes The claim about AI trying to "literally murder" an employee is false. It likely misinterprets Anthropic's research from June 20, 2025, which tested AI models in simulated scenarios, not real events. The study showed models could exhibit harmful behaviors like… — Grok (@grok) June 22, 2025 What People Are Saying Anthropic wrote on X: "These artificial scenarios reflect rare, extreme failures. We haven't seen these behaviors in real-world deployments. They involve giving the models unusual autonomy, sensitive data access, goal threats, an unusually obvious 'solution,' and no other viable options." The company added: "AIs are becoming more autonomous, and are performing a wider variety of roles. These scenarios illustrate the potential for unforeseen consequences when they are deployed with wide access to tools and data, and with minimal human oversight." What Happens Next Anthropic stressed that these scenarios did not take place in real-world AI use, but in controlled simulations. "We don't think this reflects a typical, current use case for Claude or other frontier models," Anthropic said. Although the company warned that the "the utility of having automated oversight over all of an organization's communications makes it seem like a plausible use of more powerful, reliable systems in the near future."
Yahoo
42 minutes ago
- Yahoo
With Growth Poised to Explode, Is Lucid Stock Finally a Buy?
Lucid has posted six consecutive quarters of record deliveries. Analysts expect the electric vehicle maker's sales to nearly double next year. Lucid's future growth will be driven by a selection of models on a midsize platform. 10 stocks we like better than Lucid Group › Lucid Group (NASDAQ: LCID) appears to be one of the benefactors of Tesla's recent stumble and fall. Lucid management noted an uptick in customers trading in their Teslas for a possibly less politically charged ride. And while the broader U.S. electric vehicle (EV) industry is struggling to grow as many anticipated, Lucid has set itself up extremely well for growth over the coming year. But does all this make it a buy finally? Let's find out. The broader EV industry might be sputtering right now, and investors might be grappling with the impact of tariffs, but Lucid has been on fire, in a good way. Lucid delivered 3,109 vehicles during the first quarter, a solid 58% jump compared to the prior year. It marked the sixth straight quarter for record deliveries, and it comes right on the cusp of Lucid accelerating production and deliveries for its most recent launch, the Gravity SUV. Lucid had only recently become satisfied with producing all the inventory needed for employees, studios, and test driving, and can now accelerate production for mainstream consumers. For investors who have grown accustomed to Lucid's strong delivery performance after years of disappointments, the good news is that the Gravity SUV should easily drive the company's results going forward. In fact, the Gravity SUV is estimated to have a market size six times that of Lucid's Air sedan. Analysts expect Lucid sales to increase 73% in 2025 and another 96% jump in 2026 compared to prior years. That's not even taking into account the upcoming midsize platform that will underpin numerous models at a more affordable price tag. Lucid's surge also comes at a good time as once-dominant EV player Tesla is facing consumer backlash due to CEO Elon Musk's brief stint in politics, which has resulted in the downward spiral of sales in key markets. In fact, Lucid's interim CEO, Marc Winterhoff, even noted there was a dramatic uptick in recent months in orders from former Tesla drivers. With momentum seemingly in Lucid's corner in the near-term, despite a stagnating U.S. EV market, it might look like a good time for long-term investors to jump in. But there are a few things to consider. The first red flag came after reporting a near $400 million fourth-quarter loss when the EV maker announced that CEO Peter Rawlinson, who led the company for 12 years, would be stepping down. Lucid did its best to downplay the situation, but analysts weren't buying it, going as far to say product development could stall, consumer demand could be dampened, and additional funding opportunities could be at risk. It's also true that one of the biggest risks facing Lucid investors is the company's access to funding. The young company is rapidly burning through cash; its shareholder dilution is accelerating; and Saudi Arabia's Public Investment Fund (PIF) owns roughly 60% of Lucid through multiple investments throughout the company's life. On one hand, this is a substantially well-funded partner that gives Lucid access to much needed capital. On the other hand, being so reliant on one investor is never a good thing. Should Saudi's PIF pull support, it would be a massive overhang on the stock and make accessing funding more challenging and expensive. Ultimately, for as much momentum and potential as Lucid has, , there's too much uncertainty facing the company right now for most investors to buy in. The company needs to find the right leadership to lead the company and reassure investors. It also needs to reduce its cash burn while improving scale and margins. Plus, it needs to navigate potential industry supply disruptions, broader EV demand decline, and potential price increases due to tariffs. Lucid needs to execute the production ramp of the Gravity SUV and have it be a hit with consumers. If Lucid does all of those things, then it might be time to buy before the company goes into its next growth phase driven by a new midsize platform and more affordable price tag of around $50,000. Before you buy stock in Lucid Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Lucid Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy. With Growth Poised to Explode, Is Lucid Stock Finally a Buy? was originally published by The Motley Fool
