Here's why surging oil prices may not derail the consumer trade

As Wall Street shifts its focus beyond the latest earnings from major tech firms, experts are highlighting the potential resilience of consumer stocks, despite the recent surge in oil prices triggered by geopolitical tensions in Iran. Mike Khouw, chief strategist at YieldMax and a contributor to CNBC, emphasized on the show "ETF Edge" that the impact of rising oil prices will be most acutely felt at the gas pump. He pointed to California as a significant example, where residents are currently facing an average price of approximately $5.98 per gallon for unleaded gasoline—about 41% higher than the national average, which has recently reached its highest point this year. Despite the economic pressure exerted by escalating energy costs, Khouw remains optimistic about consumer staples. He asserted that essential goods like diapers and toilet paper will continue to see steady demand, regardless of geopolitical challenges. Additionally, he expressed a positive outlook on consumer discretionary stocks, citing recent data that indicates consumer resilience. The latest CNBC/NRF Retail Monitor reported a six-month streak of growth in retail sales for March, suggesting that some sectors may have been undervalued. Paisley Nardini from Simplify Asset Management echoed this sentiment, noting that her firm is strategically investing in energy and commodity markets, steering away from the tech sector. On the trading front, crude oil prices surged significantly on Wednesday, with WTI futures climbing over 7% and Brent crude increasing by more than 6%, fueled by concerns regarding potential disruptions in the Strait of Hormuz due to ongoing tensions in Iran.