Oil has captured much of the attention amid the conflict in the Middle East. While a limited number of tankers are transiting the region, the Strait of Hormuz is largely blocked, disrupting nearly one-fifth of the world’s oil supply.

How long the war might last is not clear, but its effects are being felt in global energy markets. Oil moves easily across borders, which means supply disruptions quickly lead to higher gasoline prices.

Against the backdrop of the war, the Federal Reserve met last week and decided to hold its key rate—the fed funds rate—unchanged at 3.50–3.75%. The decision was completely expected.

There are fears that higher prices will exacerbate inflation and hurt the economy, as cash that might have gone to other items will be diverted to the gas tank.

What is the efficient market theory? Textbooks have been written to fully explain the theory. But if we can sum it up in one sentence: Assets, such as stocks, reflect all publicly available information. It is a foundational principle of finance.