Renewed U.S.-Iran Questions Weigh on Our New Homebuilding Position

Following our comments earlier on Thursday pertaining to the shares of Axon (AXON) and those for Neostellar (NSLR) Capital, we are turning our attention to the third position in the Portfolio that is moving meaningfully against us on the day.

By that we mean the shares of Builders FirstSource (BLDR), which we picked up earlier this week near $70.84.

What’s removed some but not quite all of the gains in that modest position size is the uptick in mortgage rates to 6.69%, the highest since July 2025. To that we can add that over the last five weeks, mortgage rates have climbed higher and that weighed on near-term home buying prospects. That explains the fall in new mortgage applications for the last two weeks in July reported by the Mortgage Bankers Association.

But remember, that was largely baked into Builder’s guidance when it reset its 2026 single-family housing starts forecast on July 30 to down 7% year over year compared to down 2.5% in late April and flat back in mid-February.

So while the market focuses on data that is somewhat backward looking at this point, our attention is what’s come next with oil and petrochemical prices and other inflation pressures. Those will determine what we see in upcoming data and the path for monetary policy.

That said, reported developments on Thursday between the U.S. and Iran include a draft plan that would block U.S. and Israel ships from the Strait of Hormuz with Iran issuing penalties of up to 20% of the cargo of ships in “violation.” The U.S. quickly rejected the term, reiterating any deal would includes routes with any impediments.

In response, as you might guess, oil prices are moving higher but not demonstratively, and that is lifting Treasury yields. That in turn explains some the added pressure not only on BLDR and other housing stocks, but the turn in the market as well.

The question the market is grappling with is: Where does the Trump administration go from here? A deal that would give Tehran control over the Strait of Hormuz it didn’t possess before the war, or follow through on Trump’s warnings of sharp escalation, risking a more prolonged crisis and attacks on Trump allies in the Gulf.

We’ve said many times the market is not a fan of uncertainty, and the above is helping it creep back into the market.

How much of this report is tied to a bill being reviewed in Iran’s parliament committee and an effort to push the line while negotiating with the U.S. is unclear. But the longer a deal takes to emerge following comments from White House officials about one coming Tuesday or Wednesday of this week, the more likely we’ll see oil prices will fade to the upside.

We will continue to follow developments and make adjustments to the Portfolio as required.

Getting back to BLDR shares, when we added them to our holdings, we laid out technical levels we’re watching and the one for our checkpoint. Should a more constructive deal emerge between the U.S. and Iran, that should lead to lower oil prices and help reign in inflation pressures. That could be an opportunity to add to our BLDR position.

Let’s see what happens and go from there.

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At the time of publication, TheStreet Pro Portfolio was long AXON, BLDR and NSLR.