One of the most influential stories of 2026 has been surging oil prices.

Crude oil has gone past US$107 per barrel this week after Saudi Arabia closed its east-west oil pipeline following a drone attack. 

A new report from VanEck has reinforced that if oil stays near these levels, the consequences will reach much further than the energy sector.

What is going on with oil prices?

Oil prices are elevated in 2026 largely because the conflict in the Middle East has disrupted production and shipping. 

Tight inventories and limited spare capacity have amplified the impact of these disruptions. This is leaving the global market unusually sensitive to further supply shocks.

This has also influenced the RBA’s decision to hike interest rates throughout the year in an attempt to cool inflation. 

According to VanEck, if oil, which is already up more than 76% this year, remains at these levels and trimmed mean inflation stays above 3%, the case for further rate rises will be hard to dismiss. 

A prolonged oil shock could leave a second increase in play, adding pressure to household spending and growth-oriented equity valuations.

Higher oil prices can also support the earnings of energy producers and refiners, creating opportunities for portfolios positioned to benefit.

Where is the upside?

These economic factors have led to a surge in 2026 for ASX energy stocks.

In fact, the S&P/ASX 200 Energy Index (ASX: XEJ) is up 32% year to date. 

According to VanEck, while higher oil prices pose a challenge for the wider economy, investors are exposed to the other side of the story: favourable industry conditions can produce substantial returns.

From the beginning of 2026 to the end of August, global oil refiners returned around 50% and Australian oil refiner Ampol Ltd (ASX: ALD) gained close to 40%. 

International equities returned about 5% over the same period.

These gains do not mean every energy company will benefit to the same extent. However, they do show the size of the opportunity when stronger industry conditions flow through to company earnings.

An ASX ETF to consider

Higher oil prices remain a threat to inflation, interest rates, and household spending. 

But they could also create an earnings tailwind for selected Australian energy companies. 

One ASX ETF that could be a buy in this market is the VanEck Australian Resources ETF (ASX: MVR). 

It provides a strong resources and energy tilt. 

As of August 2026, oil and gas represented 19.2% of the fund. This is much higher compared with 11.4% of the S&P/ASX 200 Resources Index (ASX: XJR).

The structure of the fund also caps each company at 8% at rebalance, preventing one company, such as BHP Group Ltd (ASX: BHP), from dominating the portfolio. 

As a result of the cap, the weight released from BHP is spread across energy producers, gold miners, critical minerals companies, and other parts of the resources sector.

That gives investors more exposure to companies that may benefit from higher oil prices without making the entire allocation dependent on one commodity or company.

Foolish takeaway

Surging oil prices are putting upward pressure on inflation and interest rates, but they are also boosting energy-sector earnings. 

This potentially benefits resource-focused investments such as the VanEck Australian Resources ETF.

The post With oil back over $100 USD per barrel, this ASX ETF could be set to benefit appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Aussie investors have another reason to keep a close eye on overseas markets on Thursday.

The US Federal Reserve has raised interest rates for the first time since July 2023, lifting its benchmark rate by 25 basis points to between 3.75% and 4%.

The hike itself wasn’t a huge surprise, but Wall Street didn’t exactly love what came next.

US shares started slipping as Fed chair Kevin Warsh spoke after the decision.

By the close, the Dow Jones Industrial Average Index (DJX: .DJI) had fallen 631 points, or 1.21%, while the S&P 500 Index (SP: .INX) dropped 0.45%. The Nasdaq Composite Index (NASDAQ: .IXIC) finished almost flat, down 0.01%.

And now some of that weakness looks set to follow us home.

The S&P/ASX 200 Index (ASX: XJO) futures are currently pointing around 0.7% lower ahead of today’s open.

Why did the Fed raise rates?

The Fed didn’t have much disagreement on this one, with all 12 voting members backing the increase.

According to the Fed, the US economy is still moving along at a “solid pace”, with domestic spending holding up, productivity growth remaining strong and unemployment little changed.

Inflation, though, is still sitting above the Fed’s 2% target.

Warsh made that pretty clear after the decision, saying inflation was still too high and had stayed there for too long.

That sent bond yields higher.

The US 10-year Treasury yield moved back above 5%, finishing around that level for the first time since 2007.

Why did Wall Street fall?

Once the first hike was out of the way, attention quickly moved to what the Fed might do next.

The Fed’s updated projections put the median federal funds rate at 4.1% by the end of 2026.

Reuters reported that 16 of 18 policymakers expect at least one more increase before the year is out.

The US dollar also strengthened after the decision, while the Australian dollar slipped below US 71 cents against the greenback overnight.

What does this mean for the ASX?

For me, today’s open probably isn’t the main thing to focus on.

A weaker start would be pretty understandable after Wall Street’s reaction overnight.

What I’d rather watch is whether the ASX can settle down once trading gets underway, or whether the selling keeps building through the session.

Another US rate hike is still possible before the end of the year, so the Fed could remain a factor for ASX investors over the coming months.

The post The Fed just hiked rates for the first time in 3 years. What does it mean for ASX investors? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Nanosonics Ltd (ASX: NAN) shares have fallen almost 30% over the past year, but according to the team at RBC Capital Markets, they could be primed for a recovery.

The broking house has just released a new research report on the company and has assigned it an outperform rating and a bullish share price target, which I’ll get to shortly.

First, let’s look at the company’s most recent news – its FY26 financial results and the announcement of a share buyback.

Steady year, with core business performing well

Nanosonics’ main revenue-generating business at the moment is its Trophon division, which placed 4230 new units during the year, up 9%.

The company’s revenue was up 3% to $203.9 million, while EBIT was $16 million, down 10%.

If the Trophon division is looked at on a stand-alone basis, its EBIT would be $50.6 million.

The company had no debt and cash on hand of $155.2 million at the end of the year, having completed a $20 million buyback.

Nanosonics also announced a new, $40 million buyback for FY27.

Chief Executive Officer Michael Kavanagh said:

Nanosonics is entering a defining period of growth. FY26 demonstrated the strength of the business we have built: a proven Trophon franchise, disciplined financial execution and in FY27 we will progress the CORIS System from CMR to commercialisation. Trophon remains the economic engine for Nanosonics and an important foundation for future value creation. We delivered 6% revenue growth and 21% EBIT growth in constant currency. We achieved our strongest annual placement volume in three years, record upgrades in North America and expanded the cumulative installed base. We also launched trophon3 and trophon2 Plus, and saw accelerating adoption of these next generation technologies in the second half.

Mr Kavanagh said the CORIS system had the potential to establish a new standard of care in endoscope reprocessing and build a recurring revenue business over time.

He said the company planned to launch CORIS across the UK, Ireland, and Australia in the first half of FY27, with the US launch to follow.

Shares looking cheap, broker says

RBC Capital Markets said in their research note that the current Nanosonics share price “is implying an overly bearish scenario”.

They added:

NAN’s Trophon business improved its profitability with EBIT increasing from $47m in FY25 to $50m in FY26. While we expect Trophon capital sales will be negatively impacted by tariffs in higher freight costs, we expect absolute profitability to continue increasing in FY27 and are forecasting Trophon only EBIT of $54m (+8%). We value the Trophon only business at $3.55/share.

RBC has revised its forecasts to assume CORIS hits breakeven over the horizon period.

Its price target for Nanosonics shares has increased from $3 to $3.75, compared with a share price of $2.88 at the time of writing.

Nanosonics is valued at $836.9 million.

The post This ASX biotech could jump more than 30%, one broker says appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nanosonics. The Motley Fool Australia has recommended Nanosonics. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.