Global bond yields moved higher as tensions in the Strait of Hormuz flared up. That is creating some anxiety on Wall Street, especially with investors already worried about whether higher yields could pressure stocks.
There is a theory that investors will leave the stock market to buy bonds. But consider the iShares 20+ Year Treasury Bond ETF (TLT). So far this year, it is down more than 6%. Since March 2020, it is down almost 55%.
The problem is that when rates rise, bond investors lose money. So, do investors really want to get out of stocks to buy something that is losing money? Of course not.
There are a lot of interesting things going on, but there is always a solution. The solution is strong earnings, strong sales, and productivity enhancements.
How investors can profit from the chaos
While there is always chaos in some corner of the market, there is always opportunity as well. Right now, energy is one of the most profitable sectors of the market so far in 2026. Here are two companies that investors can consider to profit from the geopolitical chaos.
Marathon Petroleum Corporation is picking up the refinery slack
Refineries in the U.S. have been operating close to maximum capacity since the conflict in the Middle East escalated and energy shipments through the Strait of Hormuz were curtailed. Add in the fact that the ongoing Russia-Ukraine war has halted diesel exports from Russia, and it’s easy to see why U.S. refiners have been trying to pick up the slack.
One company that’s prospered in this environment is Marathon Petroleum Corporation (MPC), one of the biggest oil refiners in the U.S. The company has 13 refineries and the capacity to refine about three million barrels of crude oil per day.
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For the second quarter, the company reported that earnings surged 325% year-over-year to $5.1 billion, or $17.73 per share, and revenue increased 53.5% year-over-year to $52.34 billion. The consensus estimate called for earnings of $13.95 per share and revenue of $41.44 billion, so MPC posted a 27% earnings surprise and a 26.3% revenue surprise.
In the wake of these stunning results, analysts have upped third-quarter earnings estimates by a whopping 127% in the past three months. Third-quarter earnings are now forecast to soar 547.5% year-over-year to $19.49 per share. MPC is a Conservative buy below $401.
My stock grading system rates Marathon Petroleum as an A.
Phillips 66’s (PSX) diversified business is a growth driver
Like Marathon Petroleum, Phillips 66 (PSX) has benefited from the uptick in U.S. refining, robust refining margins, and increased shipments of refined products worldwide.
What makes Phillips 66 different from Marathon Petroleum is that it is a more diversified energy company, with midstream, chemicals, marketing, commercial, and renewable fuels businesses. The diversification of its business has been a strong driver of growth for Phillips 66.
In the second quarter, Phillips 66 reported that earnings soared 289.3% year-over-year to $3.79 billion, or $9.41 per share. Analysts expected only $7.50 per share in earnings, so Phillips 66 posted a 25.5% earnings surprise.
Looking ahead to the third quarter, analysts anticipate equally strong results: Earnings are forecast to jump 267% year-over-year to $9.25 per share, and revenue is expected to grow 20.6% year-over-year to $42.19 billion. Earnings estimates have also been revised 56.3% higher in the past three months, so Phillips 66 is likely gearing up for its fifth-straight quarterly earnings surprise. PSX is a Conservative buy below $264.
My stock grading system rates Phillips 66 as an A.
For more information about my stock grading system, click here.
Related: Goldman Sachs sends strong warning to bond investors
