The Cro Capital Report

Good morning, and welcome to another edition of The Cro Capital Report, your weekly update on market dynamics, energy shifts, and portfolio positioning. Today, we focus on escalating Middle East tensions, soaring energy prices, and the ongoing strength of our uranium thesis.

Portfolio Performance Update: Outperforming Amid Volatility

As of the Juneteenth market close, the Cro Capital portfolio is up +4.48% year-to-date, outperforming the S&P 500’s +1.91% gain. Our recent outperformance is thanks in large part to a strong rally in the URA ETF, which climbed another 5% over the past two weeks on continued momentum in nuclear energy policy and supply disruption fears.

But it wasn’t just uranium driving markets—geopolitical tensions spiked, oil prices surged, and volatility made a sharp return. Here’s what’s moving markets, how it affected our portfolio, and what we’re doing next.

Figure 1: Markets at a Glance Month-over-month (May 19th–June 19, 2025)

• S&P 500: $5,980.87 — ↑ 0.29%

• VIX (Volatility Index): 22.17 — ↑ 22.22%

• 10-Year Treasury Yield: 4.391% — ↓ 20.6 bps ( ↓ 0.206%)

• U.S. Dollar Index: $98.76 — ↓ 1.20%

• Crude Oil: $73.88/barrel — ↑ 18.89%

• Copper: $4.86 — ↑ 4.03%

• Gold: $3,387.40 — ↑ 4.76%

• Uranium: $74.80 — ↑ 4.91%

Oil Prices Surge on Middle East Conflict

Due to the escalating war between Iran and Israel, oil prices have risen sharply, climbing 18.89% in recent weeks. According to the Bureau of Labor Statistics and the Relative Importance of Components in the Consumer Price Indexes, crude oil-derived products—such as gasoline, fuel oil, and other petroleum-based fuels—make up roughly 3.14% of the CPI basket (see below). This surge in oil prices could contribute about 0.59 percentage points to the monthly headline CPI.

While energy makes up a smaller portion of the CPI compared to categories like housing or food, its price volatility gives it an outsized impact on short-term inflation trends. Meanwhile, although the U.S. 10-year Treasury yield has recently declined, markets remain on edge. If the conflict continues or spreads across the Middle East, sustained high oil prices may drive inflation higher, pressuring the Federal Reserve to keep interest rates elevated for longer. As a result, investors could demand higher yields now, expecting inflation to erode the real value of future bond payments.

Crude Oil-Derived Products in the CPI Basket

Gasoline (all types): accounts for 2.902% of the CPI basket and is directly derived from crude oil.

Other motor Fuels: such as diesel and ethanol blends, represent 0.081% of the CPI basket.

Fuel oil: used primarily for residential heating and also a direct derivative of crude oil, makes up 0.071%.

Propane and Kerosene: which are partially petroleum-derived, contribute 0.082% to the CPI basket.

Altogether, these categories make up approximately 3.14% of the CPI basket, representing the total crude oil-derived portion.

Iran and Israel Conflict Explained: What the Iran–Israel Conflict Means for Markets

Last week, Israel launched direct airstrikes on Iranian nuclear sites, escalating a long-simmering shadow war into open conflict. While Israel cited fears that Iran is within months of building a nuclear weapon, the timing also reflects shifting political dynamics, both domestically and globally.

President Trump initially voiced skepticism but quickly pivoted to full-throated support, demanding Iran’s “UNCONDITIONAL SURRENDER” and signaling that U.S. military involvement is on the table. Intelligence reports suggest Iran has prepared missile systems for potential retaliation on U.S. bases in the region.

Market reaction was swift. Crude oil jumped nearly 19%, gold surged 4.8%, and the VIX spiked over 22% as investors priced in geopolitical risk. While the conflict’s outcome remains uncertain, we believe defense contractors may see tailwinds for the remainder of 2025. Though ethically complex, it’s a sector likely to benefit from increased defense spending and global rearmament initiatives.

More Positive News for Uranium

The House-passed “One Big Beautiful Bill” includes a provision that disqualifies nuclear power plants from receiving the zero-emission production tax credit (PTC) if they use fuel sourced from “covered nations” like Russia, China, Iran, or North Korea. This supports Cro Capital’s thesis that the U.S. must re-shore and rebuild its upstream nuclear fuel infrastructure.

Additionally, on June 16th, the Senate Finance Committee released a draft version of the bill that softens phase-downs for nuclear technologies, likely to limit the long-term fiscal impact of the credit. The draft also keeps the nuclear PTC mostly intact through 2033–2036. This preserves incentives while maintaining pressure to reduce foreign dependency. At the same time, the bill scales back solar and wind credits more aggressively, further solidifying nuclear power as a long-term bet in the global energy transition.

Our Positioning Going Forward:

• Oil & Inflation: We’re not adding to energy at the moment, but we’re closely monitoring CPI. If inflation surprises to the upside, we may add to our inflation-sensitive equities, such as industrials, commodity producers, or pricing power leaders in consumer staples (Ticker: IYK).

• Defense Contractors: We’re watching closely. While we haven’t added exposure, we recognize the sector may rally on increased global defense budgets and U.S. military engagement rhetoric.

• Uranium: Staying long. Supply/demand imbalances, U.S. re-shoring, and strong political support continue to make this one of our highest-conviction themes.

Final Thoughts

The market is entering a new phase. It’s less about soft landings and more about geopolitical risk, commodity shocks, and capital rotation. Cro Capital’s strategy remains flexible, focused, and built around high-conviction macro themes.

We’ll continue to stay ahead of the noise, filter for signal, and adapt in real time.

As always, please share with friends using the link below, and feel free to give us feedback by replying to this newsletter or emailing us at [email protected]. Thanks!

— The Cro Capital Team

*The information provided in The Cro Capital Report is for informational and educational purposes only and should not be construed as investment advice, a recommendation, or an offer to buy or sell any securities. The views expressed are those of Cro Capital and are subject to change at any time without notice. While we strive to ensure accuracy, we make no representations or warranties as to the completeness or reliability of the content. Always do your own research and consult with a licensed financial advisor before making any investment decisions. Investing involves risk, including the potential loss of principal.