What Happened?
A number of stocks fell in the afternoon session after crude oil edged lower on reports that the U.S. and Iran were nearing a draft peace resolution.
Adding to the weakness, Borr Drilling (BORR) dropped 16% after missing revenue expectations, leading the sector decline. The Iran conflict embedded roughly $15-20/barrel of "Hormuz risk" premium in crude since April.
Peace headlines unwind that premium instantly and energy equities, priced as leveraged plays on oil, fall faster than the underlying. Borr Drilling's miss compounded the damage at the high-beta end: offshore drillers carry the highest operational leverage to crude and the largest downside when sentiment shifts.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- U.S. Shale E&P company Matador Resources (NYSE: MTDR) fell 5.3%. Is now the time to buy Matador Resources? Access our full analysis report here, it’s free.
- Oilfield Services company ProFrac (NASDAQ: ACDC) fell 4.8%. Is now the time to buy ProFrac? Access our full analysis report here, it’s free.
- U.S. Shale E&P company HighPeak Energy (NASDAQ: HPK) fell 5.4%. Is now the time to buy HighPeak Energy? Access our full analysis report here, it’s free.
Zooming In On HighPeak Energy (HPK)
HighPeak Energy’s shares are extremely volatile and have had 70 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 3.9% as of a diplomatic breakthrough between the U.S. and Iran sent crude oil prices tumbling.
West Texas Intermediate (WTI) crude futures plunged more than 5% to fall below the $100 per barrel mark, while the global benchmark, Brent crude, also saw a significant drop. The sell-off was fueled by comments from U.S. President Trump indicating that talks with Iran were in their final stages, raising expectations that a conflict could be avoided. A de-escalation in Middle East tensions could lead to the restoration of oil supply from the region. The prospect of more barrels entering the market puts downward pressure on prices, as an increase in supply typically leads to lower costs for the commodity.
HighPeak Energy is up 63.4% since the beginning of the year, but at $7.31 per share, it is still trading 38.6% below its 52-week high of $11.90 from June 2025. Despite the year-to-date gain, investors who bought $1,000 worth of HighPeak Energy’s shares 5 years ago would now be looking at only $777.13.
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