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Energy prices operate as a cost floor across nearly every sector that moves physical goods. When that floor rises sharply, equity markets reprice.
Oil surged in the latest session, pulling Wall Street lower and sending the kind of broad-market pressure that runs hard through afternoon trading. The energy cost channel The mechanism runs along two paths.
Oil hits corporate income statements first through direct fuel and feedstock costs. Indirect pressure on logistics and raw materials follows.
Companies that cannot pass those costs to customers absorb the compression to margins, and equity valuations discount that pressure forward. Thursday's broad stumble tracked this pattern.
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