What Happened?
A number of stocks fell in the afternoon session after crude oil prices pulled back from the previous day's rally. West Texas Intermediate (WTI) crude fell 2.2% to settle near $71.88 per barrel, while the international benchmark Brent crude slipped below $77 per barrel.
The pullback occurred despite the U.S. military confirming secondary strikes on Iran and President Trump declaring the recent ceasefire "over." Instead of pricing in further escalation, investors took profits as satellite vessel tracking data indicated that tanker traffic through the Strait of Hormuz was quietly continuing despite the geopolitical rhetoric. The session confirmed that the energy sector's valuation was being dictated almost entirely by the geopolitical risk premium in the Middle East, rather than underlying supply and demand fundamentals.
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:
- Oilfield Services company ProFrac (NASDAQ: ACDC) fell 3.5%. Is now the time to buy ProFrac? Access our full analysis report here, it’s free.
- Mixed or Offshore Upstream E&P company SM Energy (NYSE: SM) fell 3.2%. Is now the time to buy SM Energy? Access our full analysis report here, it’s free.
- Oilfield Services company Borr Drilling (NYSE: BORR) fell 2.8%. Is now the time to buy Borr Drilling? Access our full analysis report here, it’s free.
Zooming In On ProFrac (ACDC)
ProFrac’s shares are extremely volatile and have had 61 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 gained 8.4% on the news that President Trump declared the Iran ceasefire "over" and threatened fresh strikes, sending oil prices sharply higher and lifting the broad energy complex.
Oilfield services firms (the companies that supply rigs, fracking crews, drilling fluids, and completion equipment) are a bet on their customers' willingness to spend. When crude jumps, exploration and production companies see fatter cash flows and stronger incentives to drill, which historically flows through to higher rig counts, more completion work, and firmer service pricing.
That demand read-through is why services names often move more than the oil price itself. The leverage cuts both ways, which is the key caveat: the session's gain rests on a geopolitical supply-risk premium rather than a durable increase in drilling budgets, so if tensions ease and crude retreats, the same names that rallied could give back the move just as quickly.
ProFrac is up 20.9% since the beginning of the year, but at $4.89 per share, it is still trading 40.4% below its 52-week high of $8.19 from July 2025. Investors who bought $1,000 worth of ProFrac’s shares at the IPO in May 2022 would now be looking at an investment worth $269.74.
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