War Clouds! Wall Street's Two Giants Issue Final Ultimatum: If Oil Prices Spiral Out of Control, US Stocks Will Be Bloodbathed 15%, Can Your $BTC and $ETH Escape Unscathed?

Oil prices are becoming the Damocles sword hanging over the US stock market. Recently, two top Wall Street institutions issued clear warnings that sustained high oil prices could trigger a chain reaction, pushing major stock indices into deep correction.

JPMorgan Private Bank stated in a report that if oil prices remain above $90 per barrel for an extended period, it could trigger a domino effect. The transmission path is clear and brutal: rising oil prices directly suppress the stock market, stock declines weaken consumption through the wealth effect, and ultimately drag down overall economic growth. They estimate that the S&P 500 could face a correction of 10% to 15%.

Goldman Sachs’s analysis is more quantitative. Its US equity strategy team leader Ben Snider envisioned two scenarios. Under a mild shock, the S&P 500 could fall to 6,300 points, about 10% below its historical high. If the impact is as severe as the most serious periods in recent decades, the index could drop 19%, reaching 5,400 points.

Historical data provides reference. During oil price surges in 1974, 1980, 1990, and 2022, the median decline of the S&P 500 was 12%, with a median peak-to-trough drop of 23%. The only exception was after the 1979 Iranian Revolution, when the Federal Reserve’s brief rate cuts temporarily supported the market, but stocks ultimately fell sharply during the 1981 recession.

The core of the transmission mechanism lies in the direct squeeze on consumers’ wallets. According to AAA data, the national average gasoline price has reached $3.63 per gallon, up 21% since the recent escalation of geopolitical conflicts. This directly erodes household disposable income.

On the other hand, the power of the wealth effect should not be underestimated. Federal Reserve data shows that in Q3, US households held stocks and mutual funds worth up to $56.4 trillion. JPMorgan estimates that for every 10% decline in the S&P 500, US consumer spending could decrease by about 1%. The combined effect of high oil prices and falling stock markets could create a destructive shock to demand.

Currently, international oil prices have hovered around $100 per barrel for several days, with ongoing concerns about Middle Eastern supply disruptions. Meanwhile, US stocks have entered a technical correction zone. If oil price pressures cannot be alleviated, there is a risk of further deepening the decline in the stock market.

However, Goldman Sachs’s report also points out some buffers. The US economy’s dependence on oil has significantly decreased, and increased domestic oil production has somewhat offset supply shocks. Even in an extreme scenario where the Strait of Hormuz is disrupted for 60 days and oil prices soar to $145 per barrel, their model shows US GDP growth could still approach 2% in Q4 2026.

For the crypto market, sharp volatility in traditional risk assets has never been isolated. If US stocks experience a deep correction of over 10% due to oil price shocks, market risk appetite will sharply contract, and liquidity could face tests. Mainstream cryptocurrencies like $BTC and $ETH are unlikely to completely detach from this macro sentiment in the short term. The lesson from history is that when dominoes start falling, few assets can remain unscathed.

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