Dow Inc. (DOW) is higher in Wednesday trading as the market continues to react to the company’s late-April earnings update that highlighted improving pricing and a better-than-expected revenue outlook. The setup is being driven by supply tightening across key petrochemical chains, which has supported product pricing and raised expectations for sequential margin improvement into the second quarter.

Dow has pointed to broad constraints in energy and petrochemical supply, with disruption rippling through ethylene and polyethylene markets. Management materials around the Q1 release described a supply picture where a meaningful share of global capacity is offline or constrained, and the company has been pushing through multiple polyethylene price increases across March, April, and May—helping investors frame a near-term earnings inflection even as macro uncertainty remains elevated.

Investors will be focused on whether realized pricing holds as logistics normalize and competitors restart capacity, and whether demand improves enough to support higher utilization rates. The other swing factor is cost: higher feedstock and energy prices can compress spreads quickly, so the durability of margin expansion will depend on how much of the cost inflation Dow can pass through and how fast the supply backdrop changes.