Marathon Petroleum Plunges 5.15% Amid Sector Rotation and Revenue Concerns

Summary
• Marathon Petroleum (MPC) slumps 5.15% to $175.95, hitting a 20-day low amid broader market weakness.
• Sector rotation and projected 8.62% year-over-year revenue decline fuel investor caution.
• Analysts maintain a 'Hold' to 'Overweight' stance, with price targets ranging from $169 to $231.

Marathon Petroleum’s sharp intraday decline reflects a confluence of sector underperformance and macroeconomic headwinds. With the S&P 500 and Nasdaq-100 both in negative territory, energy stocks face renewed pressure as investors pivot to defensive assets. The stock’s 5.15% drop—its steepest since the 2020 oil crash—highlights growing skepticism over refining margins and global demand amid a slowing manufacturing sector.

Sector Rotation and Revenue Projections Weigh on MPC
Marathon Petroleum’s selloff is driven by sector rotation and a projected 8.62% year-over-year revenue decline for Q4 2025. Despite a Zacks Rank of 3 (Hold) and a 4.71% EPS estimate increase, the market’s focus has shifted to macroeconomic risks, including a 5-month low in U.S. manufacturing activity and a 4.75-year low in WTI crude prices. Analysts note that while long-term fundamentals for U.S. oil and gas names remain intact, near-term oversupply and high gas storage levels have eroded investor confidence. The stock’s underperformance against the S&P 500 and Oils-Energy sector underscores a broader flight to quality in a risk-off environment.

Energy Sector Under Pressure as MPC Trails Peers
The Oil & Gas Refining & Marketing sector is broadly underperforming, with Valero Energy (VLO) down 2.8% and Phillips 66 (PSX) falling 6.6%. Marathon Petroleum’s 5.15% decline mirrors the sector’s 3.3% average drop, reflecting shared exposure to refining margins and global demand volatility. While MPC’s projected quarterly revenue of $30.58 billion remains robust, the 8.62% year-over-year decline has amplified sector-wide caution. Investors are increasingly favoring midstream and exploration plays over refining, as highlighted by Mizuho’s recent upgrade of U.S. oil E&Ps.

Bearish Setup and High-Leverage Put Options for Short-Term Bets
• 200-day average: 168.44 (below current price) • RSI: 39.59 (oversold) • MACD: -1.33 (bearish divergence) • Bollinger Bands: Lower bound at 184.03 (broken) • Key Support: 189.99–190.32 (30D) • Resistance: 195.24–196.87 (200D)

Marathon Petroleum’s technicals suggest a short-term bearish bias, with RSI in oversold territory and MACD signaling momentum divergence. The stock is trading below its 200-day moving average and has broken the lower Bollinger Band, reinforcing a potential continuation of the downtrend. For traders, the MPC20260116P180 and MPC20260116P175 put options offer high leverage (23.51% and 34.62%, respectively) and moderate deltas (-0.566 and -0.432), making them ideal for capitalizing on a 5% downside scenario. Both contracts exhibit strong liquidity (turnover of 9,344 and 13,438) and implied volatility in the mid-27% range, balancing risk and reward. A 5% drop to $167.15 would yield a 23.5% payoff for the 180-strike put and a 34.6% payoff for the 175-strike put, assuming a 5% move from the current $175.95 level. Aggressive bears may consider MPC20260116P180 into a breakdown below $180, while cautious traders might target MPC20260116P175 for a deeper correction.

Backtest Marathon Petroleum Stock Performance
The backtest of Morgan Stanley Capital International (MPC) after an intraday percentage change of less than -5% from 2022 to the present shows favorable performance metrics. The 3-Day win rate is 57.21%, the 10-Day win rate is 58.84%, and the 30-Day win rate is 61.16%. Additionally, the maximum return during the backtest period was 7.06%, which occurred on day 59. These results indicate that MPC tends to recover from significant intraday plunges with positive short-to-medium-term gains.

Watch for $180 Breakdown and Sector Rotation Signals
Marathon Petroleum’s near-term outlook hinges on a critical $180 support level and broader sector rotation. A breakdown below this threshold could trigger a retest of the 52-week low at $115.10, while a rebound above $190.32 may signal a resumption of the long-term bullish trend. Investors should monitor the S&P 500’s response to Fed policy cues and oil prices, which remain elevated despite the current selloff. For now, the MPC20260116P180 put option offers a high-leverage, high-liquidity play on a 5% downside scenario. Meanwhile, sector leader Valero Energy (VLO), down 2.8%, underscores the sector’s vulnerability to refining margin pressures. Aggressive traders may consider shorting MPC into a breakdown below $180, while long-term holders should reassess their exposure to refining plays in favor of midstream and E&P names.