Moe’s Market Memo – May 8, 2026

Weekly data-driven insights on the markets and economy

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Mohammad Abouchleih, MBA, CIMA®
Investment Analyst

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Aluminum Shockwaves

Aluminum prices have surged to multiyear highs following the Iran war, disrupting supply through the Strait of Hormuz and driving sharp cost pressures across autos, beverages, and consumer goods. Companies like Ford and Molson Coors are absorbing higher input costs through hedging and margin mitigation, but Wall Street expects limited near-term relief as supply growth slows and energy-linked production costs rise.¹

Fuel Markets Absorb a War Premium

U.S. gasoline prices have surged roughly 50% since the Iran war began, with the national average hitting $4.48 per gallon as crude oil markets reel from severe supply disruptions. The effective shutdown of the Strait of Hormuz — a critical chokepoint for global oil flows — has pushed crude prices sharply higher, a move that has translated quickly and almost directly into higher prices at the pump. With geopolitical risk premiums rising and no quick restoration of normal shipping conditions in sight, economists warn fuel costs could remain elevated for months even if the conflict eases.²

Delta Trims Short‑Haul Service

Delta Air Lines will eliminate food and beverage service on flights under 350 miles starting May 19, a change that affects roughly 9% of its network and leaves only first-class passengers with full service on those routes. The airline says the move is meant to standardize the onboard experience, while simultaneously expanding food and drink offerings on longer flights for Comfort and Main cabin travelers. The adjustment comes as airlines face rising jet fuel costs tied to the Iran war, underscoring how carriers are fine-tuning service models to protect margins amid sustained cost pressure.³

Spirit’s Exit Lifts Fares

Spirit Airlines’ collapse has triggered a rapid reshuffling of U.S. air capacity, with rivals moving quickly to absorb its routes, gates, and stranded customers. While Spirit accounted for only about 1.5% of domestic capacity, analysts say its disappearance removes a key source of low-cost competition, giving airlines more pricing power on overlapping routes. Combined with already-elevated jet fuel costs tied to the Iran war, the loss of the budget carrier is expected to push airfares higher across the industry in the near term.⁴

Wellness Fuels Expansion

Smoothie King is accelerating growth as wellness trends — from higher protein and fiber demand to backlash against artificial ingredients — drive stronger consumer spending on health-forward offerings. The privately held chain has lifted system-wide sales 64% over the past five years and plans to open more than 200 new locations, supported by a refreshed store design and an expanded food menu including flatbreads. Even as higher gas prices and tighter consumer budgets weigh on restaurants broadly, management believes health-focused indulgences remain resilient, positioning the brand to gain share in an increasingly competitive wellness market.⁵

Low‑Cost Air Travel Loses Its Anchor

Spirit Airlines has ceased operations after failing to secure an 11th‑hour bailout, marking the collapse of the U.S. airline that pioneered ultra‑low‑cost travel and pressured fares industrywide. Years of operational missteps, a blocked merger, intensifying competition and a sharp spike in jet fuel prices tied to the Iran conflict ultimately overwhelmed the carrier, even as it attempted a second bankruptcy restructuring. Spirit’s shutdown eliminates a major source of low‑fare capacity, a shift analysts expect will push airfares higher in affected markets while rivals move quickly to absorb its routes and gates.⁶

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¹Harring, Alex. “Aluminum Prices Face Pressure From Hormuz Risks, Raising Costs for Ford and Molson Coors.” CNBC, 5 May 2026, https://www.cnbc.com/2026/05/05/aluminum-prices-hormuz-ford-molson-coors.html. Accessed 6 May 2026.

²Bussewitz, Cathy. “Gas Prices Could Rise if War With Iran Disrupts the Strait of Hormuz.” Associated Press, 5 May 2026, https://apnews.com/article/gasoline-oil-war-iran-strait-of-hormuz-0e5b61be4a4c8a8a077ed5ff6f84c0ce. Accessed 6 May 2026.

³Cerullo, Megan. “Delta Cuts Food and Drink Service on Short Flights Under 350 Miles.” CBS News, 5 May 2026, https://www.cbsnews.com/news/delta-cuts-food-drink-service-short-flights-350-miles/. Accessed 6 May 2026.

⁴Josephs, Leslie. “Spirit Airlines Cuts Flights as Rivals Crowd Key Routes.” CNBC, 4 May 2026, https://www.cnbc.com/2026/05/04/spirit-airlines-flights-rivals.html. Accessed 6 May 2026.

⁵Lucas, Amelia. “Smoothie King Plots Expansion as Wellness Trends Boost Sales.” CNBC, 1 May 2026, https://www.cnbc.com/2026/05/01/smoothie-king-plots-expansion-as-wellness-trends-boost-sales.html. Accessed 6 May 2026.

⁶Josephs, Leslie. “Spirit Airlines Seeks Trump Administration Help as It Weighs Its Future.” CNBC, 1 May 2026, https://www.cnbc.com/2026/05/01/spirit-airlines-trump-bailout.html. Accessed 6 May 2026.