The Profit Margin: March 23, 2026
Statistic of the Week
Prior to the conflict with Iran, approximately 138 ships per day were passing through the Strait of Hormuz, carrying roughly 20% of the world’s oil supply. Since the onset of hostilities, traffic has dropped sharply to just 5–6 ships per day. In total, 99 ships have transited the Strait, including 29 Iranian-flagged vessels and 9 Chinese-flagged vessels.
Global Perspective
Central banks took a cautious approach last week amid the conflict with Iran. The Bank of Japan held rates, the Bank of Australia raised its target rate by 0.25% to 4.1%, and the Federal Reserve left its policy rate unchanged at 3.50%–3.75%. Rising energy costs, and their potential impact on inflation, remain a key concern for policymakers. As a result, expectations for a Fed rate cut by year-end have continued to decline.
Market Moving Events
Monday: Construction Spending
Wednesday: Import Prices
Thursday: Jobless Claims
Friday: Consumer Sentiment
Commentary
While headlines have focused on the conflict in Iran and equity market movements, activity in fixed income and precious metals markets is also worth noting. Treasury yields have risen for three consecutive weeks, with the 10-year yield closing Friday at 4.39%, reflecting expectations for higher inflation over a longer period.1 At the same time, gold experienced its worst week in 14 years.2 Despite still being up more than 4% year-to-date,3 last week’s move suggests a shift toward liquidity, with investors favoring cash in the near term.
All three major domestic equity indices moved lower on the week. The S&P 500, the most diversified of the group, declined 1.90%, while the Nasdaq fell 2.07% and the DJIA dropped 2.11%.4 Notably, small-cap stocks entered correction territory,5 defined as a decline of at least 10% from recent highs, while the Nasdaq remains just outside that threshold.6 Since the onset of the conflict with Iran, the S&P 500 has fallen approximately 5%. Historically, market reactions to geopolitical events have been relatively contained. Since World War II, the S&P 500 has declined an average of 4.5% at the onset of a conflict, before stabilizing and, in many cases, recovering in the months that follow. On average, markets have been higher roughly three months later, particularly in scenarios where economic damage remains limited.7
The week ahead is light on economic data. However, numerous FOMC officials are scheduled to speak. Their commentary, along with ongoing geopolitical developments, will likely be key drivers of market activity.
Chart of the Week
During periods of uncertainty, it is important to remember that market pullbacks are a normal part of investing. Since 1980, the average year has experienced an intra-year decline of approximately 13.5%, while still producing average annual gains of around 9%.
Source Materials
Market Moving Events:
MarketWatch.com
Chart of the Week:
Clearnomics,
Standard and Poor’s
Statistic of the Week:
BBC
Global Perspective:
The Economist
Commentary:
1. MarketWatch.com, Investor’s Business Daily
2. MarketWatch.com
3. Barron’s
4. Bloomberg
5. MarketWatch.com
6. Bloomberg
7. MarketWatch.com, Investor’s Business Daily