Stocks Slide as Oil Jumps on Rising US-Iran Tensions | The Close 2/19/2026
Speakers
Chris Pickett — CEO, Flock Freight
— Chopping Block co-host
Summary
- Geopolitical Risk & Market Rotation: Markets are sliding on rising US-Iran tensions, with oil jumping and the VIX reclaiming the 20 handle. There is a rotation out of Big Tech (down 0.7%) and into defensive assets like gold and bonds.
- AI Capex Reality Check: While "skittishness" exists regarding AI ROI, corporate leaders (CRH, Stagwell) argue the physical build-out (data centers) and implementation phase are just beginning, suggesting the trade is shifting from pure software hype to infrastructure and application.
- Private Credit Liquidity Fears: Blue Owl Capital (OWL) restricting withdrawals has spooked the sector, dragging down peers like Apollo and Blackstone. However, analysts argue the underlying asset quality remains high (selling at ~99% of par), framing the selloff as a sentiment-driven overreaction.
- Biotech Renaissance: A "nuclear winter" in biotech is thawing, driven by a patent cliff forcing Big Pharma to deploy $138B in M&A capital, opening the IPO window for 2026.
- Bitcoin Maximalism: Tim Draper predicts a "gravitational pull" toward Bitcoin away from other crypto assets, driven by regulatory clarity and its utility as a record-keeping system.
Trade Ideas
Blue Owl (OWL) restricted withdrawals from a retail fund, causing the stock to drop ~6%. However, they sold underlying loans at 99.75% of par to generate liquidity. The market interprets "gating" as a sign of toxic assets (like 2008). The reality is the assets are healthy (selling at par). The selloff is a sentiment-driven overreaction to a liquidity mismatch mechanism, not a credit quality issue. LONG OWL (Buy rating). Reputational damage leads to a halt in new fundraising.
BlackRock notes that despite market skittishness, economic fundamentals (investor production, labor market) remain strong. However, clients have a structural under-allocation to Emerging Markets (EM). The "skittishness" is positioning-driven, not fundamental. The trade is to diversify *within* AI (moving from hyperscalers to the physical infrastructure/semiconductors value chain) and rotate into EM where valuations have compressed while growth remains robust. LONG diversification plays (Infra/Semis) and EM catch-up trades. Escalation in geopolitical tensions strengthening the USD, hurting EM.
Stock/Bond correlations are becoming less reliable as a hedge in the current cycle. With traditional 60/40 hedges failing to provide adequate protection during risk-off events (like the current geopolitical slide), investors must seek alternative diversifiers like precious metals and liquid alts to dampen volatility. LONG Gold and Silver as portfolio ballasts. High real rates increasing the opportunity cost of holding non-yielding assets.
CRH is currently active on over 100 data center projects in the US. Construction accounts for ~50% of the total cost of a data center, and CRH provides the essential concrete/aggregates first. While software AI stocks face valuation questions, the physical build-out is non-negotiable. You cannot have AI without the concrete shell. CRH has visibility into 2026/2027 backlogs, making it a tangible beneficiary of the "AI Capex" spend regardless of software adoption rates. LONG CRH and materials suppliers to Data Centers. Federal funding delays or a sudden halt in hyperscaler capex.
Stagwell has partnered with Palantir (PLTR) to build AI products for marketing. Penn notes that CEOs rank AI investment as their #1 priority, displacing sustainability. Wall Street is "jumpy" about AI ROI, but the actual implementation phase (application layer) is just starting. Companies like Stagwell that build the specific tools to *use* the data (via Palantir) will capture the productivity gains that justify the capex. LONG Stagwell and Palantir as application-layer winners. AI adoption slows due to regulatory hurdles or hallucination issues.
Walmart issued a conservative guide, causing a stock dip, but reported strong growth in Walmart+ members (20M) and high-income household share. The dip is a tactical reaction to guidance, not fundamentals. Walmart is winning on value *and* convenience (delivery/tech). The conservative guide masks significant earnings power derived from advertising and membership fees, which have higher margins than retail. LONG WMT into the dip. Consumer spending collapses faster than expected due to tariffs/inflation.
Draper observes a cyclical wash-out of leverage in crypto but notes Bitcoin's unique position as a transparent, immutable record keeper. Regulatory clarity in the US will drive a "gravitational pull" specifically toward Bitcoin, separating it from the broader "altcoin" market. As leverage unwinds, capital concentrates in the highest-quality asset (BTC). LONG BTC. Over-regulation or a global ban on crypto on-ramps.
Big Pharma engaged in $138B of M&A last year due to looming patent cliffs. The "nuclear winter" for biotech (2021-2024) is ending. Pharma giants *must* buy innovation to replace expiring revenue streams. This capital recycling, combined with a rotation out of tech, creates a favorable environment for biotech IPOs and acquisitions in 2026. LONG Biotech and Pharma (specifically Immunology/Inflammation). Regulatory crackdown on drug pricing or M&A antitrust blocking.
Up Next
This Bloomberg Markets video, published February 20, 2026, features Wilma Burdis, Gargi Chaudhuri, Jim Mintern, Mark Penn, Greg Melich, Tim Draper, John Flavin discussing OWL, BOTZ, SOXX, GOLD, SILVER, CRH, EQIX, STGW, PLTR, WMT, BTC, XBI, XPH. 8 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Wilma Burdis, Gargi Chaudhuri, Jim Mintern, Mark Penn, Greg Melich, Tim Draper, John Flavin · Tickers: OWL, BOTZ, SOXX, GOLD, SILVER, CRH, EQIX, STGW, PLTR, WMT, BTC, XBI, XPH