March 30, 2026
Special Update: Iran Market Correction
What Is Happening?
Major indices have now posted five straight weeks of losses, marking their longest losing streaks since May 2022, according to Fundstrat. Both the Nasdaq 100 and the Dow Jones Industrial Average officially entered correction territory last week. The S&P 500 is on the verge of joining them this week as it currently sits about 1% above a technical -10% correction from its all-time high reached only 61 days ago on January 28th.
What Is Driving the Move?
It is important to note that while any individual investor has their own political biases and opinions on the war in Iran, the market is historically indifferent to political rhetoric; it cares almost exclusively about economic impact. The drastic increase in the price of oil is the primary driver.
As the war has extended into its fifth week, elevated energy prices have led markets to price in a higher probability of rate hikes, which in turn compresses valuations. This dynamic can create sharp, fear-driven market moves in the short term, even when corporate earnings remain relatively stable.
What Does History Tell Us?
While the current headlines are jarring, it is important to remember that market corrections are a regular, healthy part of a long-term bull market. They serve to wash out excess and bring valuations back to reality.
As shown in the above chart from Goldman Sachs, geopolitical shocks are generally short-lived. Whether it was the Gulf War or last spring’s Liberation Day, markets tend to find a floor and recover once the initial uncertainty peaks. We are currently about five weeks into this event. History suggests that while the shock is painful, it rarely dictates the long-term trajectory of the economy.
What Happens Next?
We expect the bull market to resume once the uncertainty surrounding the conflict begins to decrease. However, risks remain. A prolonged disruption of the Strait of Hormuz increases the risk of a broader bear market. Furthermore, it is becoming increasingly clear that the war’s impact on energy markets will take months, not weeks, to resolve. This suggests that elevated oil prices feeding into inflation may remain a concern for longer than initially anticipated, potentially shifting the Federal Reserve’s calculus regarding future interest rate moves. We are closely monitoring these developments and adjusting portfolios as needed.
Is There Good News?
Market corrections are a normal and healthy part of investing. They occur regularly and often serve to reset valuations after periods of excess. We are beginning to see more attractive entry points in high quality companies, which is a constructive development for long-term investors. Importantly, this has been a valuation driven selloff, not an earnings driven one, which historically has led to more durable recoveries.
Ongoing Communication
During periods like this, we believe it is critical to stay proactive and engaged. We are actively reviewing portfolios, monitoring risk, and identifying opportunities created by volatility. We will continue to provide timely updates as conditions evolve.
