Motor oil could become the next supply-chain headache as major companies warn that Middle East turmoil is squeezing key ingredients used in synthetic lubricants.

Why it matters: Drivers, repair shops and auto suppliers could soon see higher prices, reduced selection and temporary out-of-stocks for some synthetic motor oils.

Driving the news: Executives at Shell, Valvoline, O'Reilly Automotive and other companies are increasingly warning investors about lubricant cost spikes, feedstock disruptions and growing pressure on synthetic motor-oil supply chains.

• The Independent Lubricant Manufacturers Association says supplies are tightening and prices are rising because of refinery outages and shipping disruptions through the Strait of Hormuz.
• "Actual shortages are starting to appear" for some synthetic oil products tied to Group III supply, Amanda Hay, global lead for base oils at ICIS, told Axios.

The big picture: The lubricant industry relies heavily on imports from the Middle East and Asia-Pacific for Group III base oils, a key ingredient in many of those modern synthetic motor oils.

• ILMA noted that recent attacks and supply disruptions have sidelined roughly 44% of U.S. Group III supply.

Reality check: Don't expect a broad disappearance of motor oil from shelves, Tom Glenn, a longtime lubricant-industry analyst and publisher of JobbersWorld, tells Axios.

• Consumers are more likely to notice reduced product selection, temporary out-of-stocks in specific viscosities, fewer promotional discounts, delayed replenishment and higher prices, he says.

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Stocks took a sharp step back today from their latest AI-fueled rally, Axios' Pete Gannon writes.

Why it matters: Inflation fears may be starting to win the tug of war in markets.

Between the lines: Investors sent a clear message today in the bond market, dumping longer-dated government securities and sending yields surging around the world.

• 🇨🇳🇺🇸 The sell-off comes after President Trump's trip to China offered no clear path to freeing up global oil supplies.
• 🛢️ Pricey oil has been a big inflation driver, and April's CPI data released Tuesday shows it's continuing to seep into prices for all sorts of other goods and services.
• 💸 Wholesale price data released Wednesday suggests things aren't getting any better.

The latest: Oil prices spiked again today, with global benchmark Brent crude rising another 3%, to $109 a barrel.

• 10-year Treasury yields rose to 4.6%, their biggest single-day jump in over a year and highest level in 15 months, WSJ noted. Yields on the 30-year rose to over 5.1%, highest closing level since July 2007.

🗣️ What they're saying: "Bond yields definitely feel like they are getting unhinged," SocGen Americas' head of research Subadra Rajappa told Bloomberg TV today.

What we're watching: Whether rising bond yields start to become the market story — denting the AI trade that's powered stocks higher since the end of March.

🚀 SpaceX is seeking to make its IPO filing public Wednesday and is eying a June 12 listing. (Bloomberg)

☕️ Starbucks is laying off 300 corporate employees in the U.S. in its third round of job cuts, part of its turnaround strategy under CEO Brian Niccol. (CNBC)

Bed Bath & Beyond's comeback is entering its next phase with the opening Saturday of its first co-branded Container Store location in Texas.

Why it matters: The new Bed Bath & Beyond is betting shoppers still have an emotional connection to the brand after its last stores closed in 2023 — and that a smaller co-branded format can succeed where its sprawling big-box stores failed.

🛁 🫙 Zoom in: The new Fort Worth-area store blends Bed Bath & Beyond products with The Container Store's organization business under one roof.

What's next: It plans to bring the format to all 98 remaining Container Store locations and roughly 100 smaller-format stores, Bed Bath & Beyond president Amy Sullivan told Axios.

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