This has been a busy week with trade wars and a lot of uncertainty for various commodities.

Most notably for the Low-Energy Fridays audience, oil—despite being exempted from many of the tariffs—fell sharply in price, and still hasn’t fully recovered to last week’s level. The reason for this is simple: Oil investors anticipate lower oil demand under the cloud of a trade war. But this simple explanation also offers some broader economic insight.

There’s a saying in economics that “the stock market has predicted nine out of the last five recessions.” In other words, negative sentiments in the market don’t always relate to more reliable indicators of economic performance. This is because the stock market is fundamentally an exercise in investor sentiment. While supply and demand determine the price of stocks, “futures,” and commodities, the supply side of stocks remains largely fixed while the demand side reflects investors’ positive or negative predictions. High stock prices for Nvidia, for example, reflect investors’ anticipation of artificial intelligence demand more so than product sales.

Read more from the R Street Institute here.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.