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Markets remained under pressure last week as the U.S.-Iran conflict — now in its fifth week — continued to drive oil prices higher and keep investors on edge. The S&P 500 fell for the fifth straight week and is now down about 7% for the year. The message from the market has been consistent: when oil goes up, stocks go down. That dynamic is still firmly in place.
| 📊 Market Snapshot — Week Ending March 27, 2026 |
| INDEX / ASSET |
CLOSE |
WK CHANGE |
YTD |
| S&P 500 |
6,369 |
▼ 2.10% |
▼ 7.1% |
| Dow Jones |
45,167 |
▼ 0.90% |
▼ 5.8% |
| Nasdaq Comp. |
20,948 |
▼ 3.20% |
▼ 11.4% |
| Russell 2000 |
~2,450 |
▼ 2.80% |
▼ 9.6% |
| Brent Crude Oil |
$110+ |
▲ 8.50% |
▲ 70% |
| Gold (Spot) |
$4,497 |
▼ 0.80% |
▲ 22% |
| 10-Yr Treasury |
4.48% |
▲ 18 bps |
▲ 52 bps |
| VIX (Fear Index) |
~30 |
Elevated |
Data sources: CNBC, Bloomberg, Reuters, Schwab, JP Morgan Asset Management — as of March 27, 2026 close. Past performance is not indicative of future results.
| 📉 What Drove Markets Last Week |
The story last week had one main character: the Iran war. Everything else — earnings, economic data, Fed policy — took a back seat to headlines coming out of the Middle East. Here’s a plain-English breakdown of what happened and why it mattered.
The Iran Conflict — Markets Swung on Every Headline
The week started with optimism — President Trump suggested negotiations were underway, and stocks popped sharply on Monday. By Tuesday, Iran denied the whole thing, and oil jumped back up. On Wednesday, news of a U.S. peace proposal sent to Iran via Pakistan gave markets another lift. Then Friday arrived: new escalations in the Strait of Hormuz, Houthi fighters in Yemen joining the conflict, and word that more U.S. troops were heading to the region. Stocks sold off hard. The Dow fell nearly 800 points. That pattern — hope, disappointment, repeat — has defined every week of this conflict.
Oil — The Most Important Number in the Market Right Now
Oil ended the week above $110 per barrel — up roughly 70% since the conflict began in late February. The Strait of Hormuz, a narrow waterway in the Persian Gulf that handles about 20% of the world’s oil supply, remains disrupted. Until that reopens, energy prices are unlikely to come down meaningfully. For everyday Americans, that means continued pain at the gas pump, now above $4 per gallon nationally.
| Think of oil as a tax on everything. When it goes up, it costs more to produce goods, ship them, and heat your home. That leaves less money for consumers to spend elsewhere — which is why stocks struggle when oil surges. |
The Fed — Stuck Between a Rock and a Hard Place
The Federal Reserve held interest rates steady at its March meeting, as expected. The challenge: inflation is rising (thanks to oil) while the job market is showing signs of softening. This uncomfortable combination — rising prices plus slowing growth — is called stagflation, and it’s the scenario markets dread most. Rate cut expectations have been nearly eliminated for 2026.
Interest Rates — Climbing and Creating Headwinds
The 10-year Treasury yield hit 4.48%, close to a nine-month high. The 30-year briefly touched 5.0%. Higher rates make bonds more attractive compared to stocks, make mortgages more expensive (now around 6.5%), and raise borrowing costs for companies — a meaningful headwind for the broader market.
| 🔭 What to Watch This Week (March 30 – April 3) |
This is a holiday-shortened week — markets are closed Friday for Good Friday. But there’s no shortage of important data. Here’s what matters:
| KEY EVENTS THIS WEEK |
| Tue 3/31 |
Consumer Confidence • JOLTS Job Openings • Nike Earnings (after close) — Q1 ends |
| Wed 4/1 |
ISM Manufacturing • ADP Jobs Report • Retail Sales • Conagra Earnings |
| Thu 4/2 |
Factory Orders |
| Fri 4/3 |
Markets Closed (Good Friday) — Jobs Report released; markets react Monday 4/6 |
| ◆ |
Jobs Report (Friday, markets closed) — Economists expect roughly 48,000 jobs added in March — a big bounce from February’s surprising decline of 92,000. The unemployment rate is expected to tick up slightly to 4.5%. Markets won’t react until Monday morning. |
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| ◆ |
ISM Manufacturing (Wednesday) — A key gauge of how factories are doing. The real focus is the “prices paid” component — if it surges, it confirms that oil costs are filtering through to the broader economy. |
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| ◆ |
Nike Earnings (Tuesday after close) — What executives say about demand and spending will give us a real-world read on how consumers are holding up. |
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| ◆ |
Consumer Confidence (Tuesday) — Expected to decline further. This tells us how optimistic — or nervous — Americans are feeling about higher gas prices and economic uncertainty. |
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| The bottom line for this week: Markets want to see a stable jobs market without a surge in inflation. Good news on jobs = good for stocks. But if prices are also rising fast, it just reinforces the stagflation concern — and that’s not good for anybody. |
| 🗺 Sectors & Assets to Watch |
Not all parts of the market are suffering equally. In fact, some areas are doing quite well. Here’s where we see opportunity versus caution right now:
| SECTOR / ASSET |
STANCE |
WHAT IT MEANS |
| Energy |
OPPORTUNITY |
Oil companies are thriving as prices surge — sector is up 33% this year |
| Defense & Aerospace |
OPPORTUNITY |
War spending is rising sharply; these companies have strong, visible demand |
| Semiconductors |
NEUTRAL+ |
AI infrastructure spending remains solid despite broader tech weakness |
| Rare Earth Materials |
NEUTRAL+ |
U.S. military dependency on rare earth supplies creates potential opportunity |
| Gold |
NEUTRAL+ |
Safe-haven appeal helps, but rising rates reduce its attractiveness |
Defensive Sectors
(Utilities, Healthcare, Staples) |
NEUTRAL+ |
Historically tends to offer relative stability and income potential |
| TIPS / Inflation Bonds |
WATCH |
Designed to protect against inflation — worth monitoring as prices rise |
| Technology / Software |
CAUTION |
Down 20% this quarter; higher interest rates and uncertainty weigh heavily |
| Financials / Banks |
CAUTION |
Flat yield curve is squeezing bank profits; IPO market remains frozen |
| Consumer Discretionary |
CAUTION |
High gas prices are eating into budgets; consumer sentiment at multi-year lows |
| 🌎 The Big Picture — What’s Really Going On |
Here are the three themes we believe every investor should understand right now:
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Oil is the master switch. — As long as the Strait of Hormuz stays disrupted, oil stays elevated, inflation stays elevated, and the Fed stays frozen. The single most important thing to watch is any sign of a genuine ceasefire or the reopening of that waterway. When that happens — and history says it eventually will — markets could rebound sharply. |
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The economy is holding up, but cracks are forming. — The job market has been the economy’s main pillar of strength. Recent data suggests it may be softening. Consumer confidence is declining. Services activity is slowing. None of this means a recession is imminent — but this conflict is taking a toll. |
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Markets are rotating, not collapsing. — Beneath the surface, there’s been a massive shift in what’s working. Energy and defense are up big. Tech and financials are down big. Make sure your portfolio is positioned for today’s environment — not last year’s. |
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| History tells us that markets have typically recovered well following geopolitical shocks — including posting strong gains 3 to 6 months after major conflicts. The path is rarely straight, but patient, well-diversified investors have generally been rewarded. We are watching closely and will continue to keep you informed. |
If you have any questions about your portfolio or what any of this means for your specific situation, please don’t hesitate to reach out to your CIAS Investment Adviser Representative. We are here to help you navigate these markets with confidence.
Edward J. Sabo
Chief Investment Officer
Capital Investment Advisory Services, LLC
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