Key Highlights

  • US Gulf Coast jet fuel was $4.632 per gallon on October 20.
  • Delta cut its 2026 adjusted EPS outlook to $5.10 to $5.60 from $6.50 to $7.50 on a $6 billion higher fuel bill.
  • The National Retail Federation forecasts holiday sales of $1.013 trillion, up 4.2%.
  • December Brent futures traded at $111.70 on October 22, up 2.65%.
  • The stopgap law funds the government through December 11, with twelve appropriations bills unfinished.

Which Travel and Consumer Stocks Face the Biggest Exposure to Oil, the Dollar and Shutdown Risk?

Airlines face US Gulf Coast jet fuel of $4.632 per gallon as of October 20, and December Brent futures traded at $111.70 on October 22. September energy prices were up 20.4% over twelve months. Retailers face a holiday forecast of $1.013 trillion, up 4.2%. The broad dollar index was 0.3% above its level a year earlier, while the dollar was 4.8% higher against the yen. No government shutdown is in effect, but funding runs only through December 11.

Airlines: How Much Is $4.63 Jet Fuel Costing Carriers?

Delta Air Lines (NYSE:DAL) said adjusted fuel expense rose 62% to $4.1 billion in the third quarter. United Airlines (NASDAQ:UAL) expects fourth-quarter adjusted EPS of $0.50 to $1.50 against a $1.76 average estimate, and Alaska Air Group (NYSE:ALK) forecast an adjusted loss of $2.00 to $2.50, with a fuel bill $1.8 billion above plan.

American Airlines (NASDAQ:AAL) posted a third-quarter adjusted loss of $0.28 against $0.36 expected on record revenue of $16.3 billion, and guided a fourth-quarter loss of $0.50 to $1.10. Airline fares rose 22.4% over twelve months, and Southwest Airlines (NYSE:LUV) is reassessing capacity. Delta's premium and loyalty revenue each rose 18%, yet American's pre-tax margin was negative 2.0%.

Oil Price Impact: How Are Higher Fuel Costs Reaching Consumer Budgets?

The September consumer price index showed energy up 5.2% on the month, headline inflation at 3.7% and core at 2.6%, so the pressure has not yet spread across the basket. Retail diesel averaged $6.29 per gallon in September, and the EIA reported distillate stocks 12% below the five-year average.

Procter & Gamble (NYSE:PG) said commodity costs reduced gross margin by 140 basis points and expects a commodity headwind of about $1.4 billion after tax in fiscal 2027. Gentherm (NASDAQ:THRM) reported gross margin of 23.3% against 24.6%, citing material inflation, freight and currency.

Retailers: Can They Protect Margins in a $1.013 Trillion Holiday Season?

The National Retail Federation expects goods inflation to average 2.5% in 2026, and says fuel and transportation accounted for 80% of goods cost increases. Other forecasts differ in period and measure, including about $1.7 trillion from Deloitte for November through January and a record $1 trillion, up 4.5%, from Bain & Company.

Tractor Supply (NASDAQ:TSCO) reported comparable store sales up 0.4%, gross margin of 36.4% against 37.4% and EPS down 11.6% to $0.43. It reaffirmed fiscal 2026 adjusted EPS guidance of $1.90 to $2.00, and shares were reported 6.24% higher on October 22.

Oil: Why Is Brent Trading Above $111?

December Brent rose $2.88, or 2.65%, to $111.70 on October 22, while West Texas Intermediate traded near $98.98. Ship-tracking data show at least 18 tanker attacks over two weeks, and Persian Gulf outflows of 8.5 million barrels a day compare with above 20 million before the war.

The EIA's October outlook sees Brent at $105 in the fourth quarter, $14 above its prior estimate. Goldman Sachs estimates global oil freight at about $20 per barrel, against $3 a year ago.

The Dollar: Is It Actually Stronger Than a Year Ago?

It depends on the currency. The broad dollar index was 121.4048 on October 16, up 0.3% from a year earlier, but the euro traded at $1.1231 against $1.1665 and the yen at 158.00 per dollar against 150.75. Rates are the main support: the Federal Reserve raised its target range to 3.75% to 4.00% in September, and the 10-year yield fell to 4.96% on October 22.

Spotify (NYSE:SPOT) said currency added about 190 basis points to third-quarter revenue growth. Deckers Outdoor (NYSE:DECK) reported net sales up 3.5%, or 2.8% in constant currency, and Procter & Gamble built a currency headwind of about $50 million into its fiscal 2027 outlook.

Shutdown Exposure: Which Stocks Face the December 11 Deadline?

Booz Allen Hamilton (NYSE:BAH) reports fiscal second-quarter results today before the open and maintained fiscal 2027 revenue guidance of $11.2 billion to $11.7 billion after prior-quarter adjusted EPS of $1.81 against $1.49 expected. Easterly Government Properties (NYSE:DEA) reports on October 26, and its rent depends on lease terms rather than annual spending decisions.

Lockheed Martin (NYSE:LMT) reported sales up 11% to $20.711 billion and a record backlog of $291.984 billion, but flagged that F-35 Lot 20 advance acquisition costs had begun to exceed contractual funding authorization. Congress is expected to take up twelve unfinished bills after the November 3 midterms, and progress on them or another stopgap would reduce the odds of a repeat of the 43-day lapse in 2025.

Travel and Consumer Exposure Compared: How Do the Numbers Stack Up?

Jet fuel at $4.34 on October 8 was about 2 times the $2.19 of a year earlier, and Delta Air Lines' guidance midpoint fell from $7.00 to $5.35, about 24%, both calculated. United Airlines' guided midpoint of $1.00 sits about 43% below the $1.76 estimate, calculated.

The 22.4% twelve-month rise in airline fares is about 8.6 times core inflation of 2.6%, calculated. The dollar's 4.8% gain against the yen compares with 3.9% against the euro, and Tractor Supply's gross margin fell 1.0 percentage point, all calculated.

What to Watch Next: Booz Allen Today, the Fed on October 27 and 28 and Fuel Into Year-End

Booz Allen reports today, October 23, and Easterly Government Properties on October 26. The Federal Reserve meets on October 27 and 28, the September personal income and outlays report arrives on October 29, and the November 3 midterms precede the October consumer price report and the EIA outlook on November 10. Jet fuel prices, which follow Gulf tanker traffic, and any 2027 capacity trims will show whether fare increases keep pace with fuel before the December 11 funding deadline.