Diesel's new peak came as AAA pegged the national average at roughly $6.31 a gallon on Wednesday. Analysts link the surge to a supply shock tied to the U.S. war with Iran. In California, AAA data shows the average price has already cleared $8, climbing nearly 20% over the past month.
Markets took the hint. Shares of J.B. Hunt slid more than 13% during Wednesday trading, marking one of the stock's roughest days since it began trading in 1983. The Dow Jones Transportation Average fell 2.78% to 20,075.41, with J.B. Hunt the biggest laggard in an index that also includes rideshare companies and airlines.
"We have seen some of the most radical and abnormal swings in fuel prices that I think we've ever seen," said Brad Delco, finance chief at J.B. Hunt, speaking at Morgan Stanley's industry conference. He flagged a potential earnings decline of 5% to 10% from the second to the third quarter because of higher fuel costs.
On the same stage in Laguna Beach, Calif., Norfolk Southern's chief commercial officer Claude Elkins put it bluntly: "We're talking about $6 diesel, but out here, it's $8 diesel, we noticed on the way in, which is like science fiction." Elkins said he is watching closely and discussing what those levels will mean for the broader economy. "That certainly is something that we have to keep our eyes open to," he said, adding that over time it will weigh on consumers.
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GasBuddy's Patrick De Haan, who serves as head of petroleum analysis, expects diesel pressures to build in the near term. He said the national average could top $6.50 within two days. His estimates suggest Michigan, Ohio and Illinois could see pump prices hit $7 a gallon in the coming days.
Even with energy squeezing budgets, retail sales rose 1.2% from July to August. Excluding autos and gas stations, sales grew at their fastest pace in more than a year.
Jacob Aiken-Phillips, the leader of Melius Research's consumer and retail research team, said diesel's record run collides with the fall harvest, pushing up expenses borne by farmers growing staples such as corn and wheat. He noted those fuel driven pressures would likely be absorbed first by farmers, transporters and retailers before working their way to consumers as higher prices. Looking further out, Canaccord Genuity analyst George Gianarikas told clients that costlier fuel could nudge more demand toward autonomous trucking and electric freight.
In 2024, transportation services contributed $1.9 trillion to the U.S. economy, more than 6% of total enhanced GDP, according to the Bureau of Transportation Statistics. So when diesel spikes, it reverberates well beyond trucking stocks. Keep an eye on fuel sensitive earnings updates like the 5% to 10% hit J.B. Hunt flagged and on benchmarks such as the Dow Jones Transportation Average to gauge how energy driven costs might ripple through shipping, farming and retail exposure.
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