Shares of the Schwab U.S. Large-Cap Growth ETF slid 1.5% to $29.09 Thursday as Iran's refusal to engage in ceasefire talks crushed a brief rally earlier in the week, dragging the fund back toward its recent lows. Tehran rejected the U.S. push for ceasefire talks, dimming expectations of a near end to the war and supporting positions that energy exports from the Strait of Hormuz will remain halted. For holders of a fund that is essentially a bet on Big Tech, the math is unforgiving.

Nearly Half the Fund Sits in the Sector Most Hurt by Rising Oil

Information technology accounts for 43.8% of SCHG's 198 holdings.

The top positions — Nvidia at 11.3%, Apple at 9.6%, and Microsoft at 7.6% — dominate the portfolio.

Tesla, Microsoft, Amazon, and Meta all dropped between 1.5% and 3% Thursday. When oil surges, it raises costs for data centers and consumer goods alike while pulling capital into energy plays — a double hit to growth names that depend on cheap capital and expanding margins.

$107 Brent Crude Is Not a Blip — It's a Structural Threat

On March 26, Brent crude jumped more than 5% to hit $107 per barrel.

The crisis has led to a near halt in tanker movements through the Strait of Hormuz, with nearly 20 million barrels per day of crude and product exports currently disrupted.

Moody's chief economist Mark Zandi warned that "if oil prices remain elevated for much longer (weeks, not months), a recession would be difficult to avoid." A recession would crush the earnings growth that justifies SCHG's lofty 34x price-to-earnings ratio.

The Monday Relief Rally Proved Fragile

Stocks rallied Monday after Trump said the U.S. and Iran held talks, giving investors hope the conflict was nearing an end. SCHG bounced from $29.29 to $29.70 that session. But Thursday's reversal wiped those gains, showing how vulnerable growth-heavy portfolios are to headline risk when geopolitics — not earnings — drive prices.

The Recession Question Looms Over Valuations

The S&P 500 has declined four consecutive weeks, now nearly 6% below its record high, with the information technology sector off 12% from its peak as investors question whether AI spending can survive an oil-driven downturn. Wall Street's consensus calls for 16.3% earnings growth in 2026, but analysts may cut those forecasts if oil stays elevated. For SCHG, whose entire thesis rests on Big Tech delivering outsized profit growth, the margin for error just shrank dramatically.