S&P 500 Stocks Near Breakout Despite Index Drop

The S&P 500 fell to its lowest level so far this year amid mounting concern that the war in the Middle East could have long-reaching consequences. Brent breached $100 per barrel again as traffic in the Strait of Hormuz is at a near standstill, and the US Navy reportedly won't be ready to escort ships through the dangerous waters until the end of the month.

While US equities were generally lower amid rising energy prices, some sectors and stocks, particularly in the energy sector, traded near 52-week highs.

Top 10 S&P 500 Stocks Near 52-Week Highs

• Chevron (CVX) +5.6% over last week
• Starbucks (SBUX) +3.2% over last week
• ConocoPhillips (COP) +2.8% over last week
• Pfizer (PFE) +1.8% over last week
• Exxon Mobil (XOM) +1.7% over last week
• Welltower (WELL) +0.5% over last week
• Altria (MO) +0.1% over last week
• Johnson & Johnson (JNJ) -0.2% over last week
• Verizon (VZ) -0.7% over last week
• HCA Healthcare (HCA) -1.0% over last week

US Oil Producers Big Gainers

Global markets are being dominated by concerns over the war, with the relatively isolated US experiencing some spillover effects. Higher energy costs are likely to boost inflation and keep the Fed from lowering rates any time soon, while a stronger dollar makes US exports less competitive amid an already high trade deficit. It was widely anticipated that the Fed would cut rates by the end of the year but now markets are almost pricing out easing for the rest of the year. The odds of a cut by December are around 50-50. The IEA has called the war the largest disruption of crude supply ever, and even plans for a joint release of up to 400 million barrels of crude from reserves have not dampened worries that there won't be enough supply to meet demand. The release includes 172 million from the US and is expected over the next 120 days, but it is unlikely to offset much of the drop in oil supplies.

Oil Majors Hitting New Highs

It's no surprise that oil majors like Chevron, ConocoPhillips and ExxonMobil are top performers as crude hits triple digits. Production in the US is in high demand to offset the loss of around 20% of global supplies that would otherwise pass through the Strait of Hormuz. The relative performance of the majors, however, reflects their exposure to the Persian Gulf. Around 4% of Chevron's production is sourced in the Gulf, making it the least exposed of the major producers. At the moment, 6 to 7% of ConocoPhillips' production cannot be exported due to the war. Meanwhile, Exxon Mobil has the most exposure, but it's mostly because nearly 60% of its LNG business is concentrated in Qatar. For comparison, European majors have relatively higher percentages, such as BP at 18% and TotalEnergies at 27%.

Starbucks Turnaround Keeps Going

The recent gains at the coffee maker are just a continuation of a trend that has driven its stock price up almost 20% this year. Starbucks' share price has been trending higher since reporting earnings a month ago that beat consensus and announcing an ambitious plan to increase the number of stores across its key Americas market. Traders are likely speculating on the war in the Middle East. North America accounts for 74% of the company's total revenue. Meanwhile, the company continues its ambition to more than double its footprint in China over the next two years. Guggenheim is the latest analyst to raise its outlook for Starbucks, having a positive view of CEO Brian Niccol's plan to improve profit margins and slim the company.

Defensive Plays Help Pfizer

Amid the uncertainty, it's logical for traders to turn to traditional safe and defensive stock positions, with pharma at the top of the list. Pfizer became notorious as a vaccine supplier, and that segment has suffered over the last couple of years, along with the stock price. But it now offers a particularly attractive 6.7% dividend yield and a consumer base that will keep buying regardless of what happens to the economy. BMO recently raised its price target for Pfizer, saying the company appeared undervalued. Recent approvals have augmented the company's drug portfolio, and it plans to complete 20 trials by the end of the year.