Energy Stocks Rise on Mideast Tensions; Eaton Jumps on UBS Upgrade

Energy stocks rallied in premarket trading Tuesday amid rising geopolitical tensions in the Middle East, providing a bright spot as U.S. stock futures pointed to a lower open for the holiday-shortened week. Corporate-specific news also fueled significant moves in several individual stocks, including Eaton and Shake Shack.

Geopolitical Tensions Boost Energy Sector

Shares of major U.S. oil and gas producers gained as crude oil prices jumped. The move followed reports that Iran warned energy infrastructure in the Gulf could be targeted in retaliation for any strikes on its assets.

The gains in the energy sector stood in contrast to broader market sentiment, which saw futures for the Dow Jones Industrial Average fall 0.8%. S&P 500 futures declined 0.3% and Nasdaq-100 futures slipped 0.1% ahead of the opening bell.

Key energy movers in premarket action included:

• Exxon Mobil (XOM): +1.8%
• Chevron (CVX): +1.7%
• ConocoPhillips (COP): +1.6%
• Valero Energy (VLO): +1.6%

Ad

Analyst Actions and Corporate News in Focus

Power management company Eaton (ETN) saw its shares jump more than 3% after UBS upgraded the stock to "Buy" from "Neutral." In a note to clients, the bank also raised its price target to $515 from $450, citing expectations for strong sales growth and improving profit margins.

Shake Shack (SHAK) shares rose approximately 1% after RBC Capital Markets initiated coverage on the stock with an "Outperform" rating. The firm set an $89 price target, telling investors it sees the company at an "inflection point" with improving scale and supply chain sophistication.

In the logistics sector, Old Dominion Freight Line (ODFL) climbed 1.3%. The advance came after the company disclosed in an 8-K filing that its revenue per day increased by 12.4% in August compared to the prior year, signaling accelerating growth.

Index rebalancing also created premarket activity, with Everpure shares rising 2.5% on the news that it and Illumina are set to join the S&P 500 index before the market opens on September 21.