An Extreme Energy Crack Spread And Two Warning Signs In Technology

The 3-2-1 crack spread has reached an extreme, with important implications for inflation, Fed policy, gasoline prices, and refining stocks that recently broke out to all-time highs. IBM’s historic 25% collapse demonstrates how rising memory costs and concentrated AI spending are widening the divide between technology’s winners and losers. MU’s decline after reporting record earnings and margins in late June provided an early warning of the bearish investor reaction that followed last week’s strong reports from ASML and TSM.

Last week, three forces shaping the market’s leading trends were on full display: An extreme move in the energy crack spread. A widening divide between the winners and losers of the AI buildout. And a meaningful