Doom Score drops four points as oil stress dominates a calmer tape
By Alex · Doom Watcher analyst
The composite score fell from 32 to 28, crossing back into All Clear territory, as financial conditions and credit stress indicators remained dormant. Energy Price Shock and Consumer Confidence are the live fault lines, with US-Iran tensions keeping oil risk elevated even as the headline number improves.
By the Numbers
The Doom Score closed at 28, down four points from yesterday's 32, and below both the 7-day average of 30 and the 30-day average of 32.5. The move drops the alert level from Caution to All Clear. Core 6 sub-score prints at 21.42 — notably low, reflecting that several heavyweight tier-1 indicators, including Financial Conditions, Bank Lending Standards, and Yield Curve, are at zero activation. Diffusion Index sits at 41.18, meaning fewer than half of tracked indicators are in deteriorating territory on a 90-day basis. Top weighted contributors are Energy Price Shock, Consumer Confidence, Home Construction, Months Supply of Houses, and Real Income — a mix of housing stress and consumer-side pressure rather than the credit or labor channels that typically anchor recession calls.
What Changed Today
Energy Price Shock holds at 100% activation with a value of 89.61 and a worsening trend — it did not drive the score lower, it remains the ceiling on improvement. Consumer Confidence activation sits at 112.5% with a worsening trend, its value of 53.3 reflecting sustained deterioration. Home Construction activation is 93.2% but trend is stable, providing no fresh impulse. Real Income activation ticked to 78% with a worsening trend, consistent with inflation eroding purchasing power. On the improving side, Trade Policy Uncertainty activation fell to 31.4%, Temp Worker Cuts improved to 59%, and Weekly Layoff Filings dropped to 0% activation at 207,500 — a meaningful labor-market signal. Financial Conditions, High-Yield Spread, and Bank Lending Standards all print at zero activation, which is the primary mechanical reason the score fell four points.
News Drivers
The score's improvement arrived against a backdrop of genuine geopolitical stress, not relief. US forces struck Iranian oil tankers, Iran seized a commercial vessel, and new sanctions targeted companies aiding Iran's weapons sector. That context explains why Energy Price Shock remains at full activation with a worsening trend despite the composite score falling. Prediction markets trimmed recession odds: Polymarket's 2026 contract moved to 22.5% from 24% a week ago; Kalshi fell to 18% from 20%. Both are directionally consistent with the score drop. Google Trends shows 'recession' search interest at 64, up 10% from 58 a week ago — a divergence worth noting, as retail anxiety is rising even as the model-based score eases. The AI chip sector rotation story carries no direct macro signal for this dashboard.
Historical Context
At 28, the score sits four points below the 7-day average of 30 and four and a half below the 30-day average of 32.5. The 90-day maximum was 38, meaning today's reading is ten points below the recent peak — a meaningful compression. All Clear readings in the high-20s, occurring alongside elevated energy stress and deteriorating consumer confidence but dormant credit and labor indicators, loosely resemble the mid-2022 window before the Fed's aggressive tightening cycle fully transmitted into financial conditions. That episode eventually pushed the score higher as credit channels activated. The current configuration — energy and consumer stress leading, credit and labor quiet — is an early-warning pattern rather than a confirmed deterioration.
What to Watch
Energy Price Shock at 100% activation is the most immediate pressure point; any further escalation in US-Iran hostilities near Kharg Island could sustain or worsen oil supply disruption. Consumer Confidence at 112.5% activation and worsening is already beyond its threshold — the next University of Michigan or Conference Board print will confirm whether this is a trend or a plateau. Real Income at 78% activation with a worsening trend is the closest tier-2 indicator to crossing into a higher-stress band. On the labor side, Unemployment Pace sits at 40% activation with a stable trend; a deterioration there would pull the Core 6 sub-score meaningfully higher. A score re-entry into Caution territory requires roughly a four-point reversal — achievable in a single session if energy or consumer indicators worsen simultaneously.