War, what is it good for?
This quarter the markets faced war on many fronts…
Tariffs - Tax or no tax
Military Action – Venezuela and Iran
Energy – Keep oil flowing around the world and the inflationary cost to do so
These factors had a major impact on financial market conditions this 1st Quarter of 2026.
Here is a timeline of the factors that initiated sell offs in the markets, causing a compounding effect that has led the markets to accumulate year-to-date losses in the U.S. Stock Market.
January 18th: “Operation Southern Spear”, the blockade of oil tankers in and out of Venezuela. International markets sold off and interest rates spiked to the highest level since August 2025. The short-term US military action netted a fast turn around and successful outcome by U.S. standards which calmed the markets and sent them moving higher.
February 2nd: Investors reacted harshly to President Trump’s nomination of Kevin Warsh as the next Federal Reserve Chairman. Unsettled investors deduced what that could mean for future U.S. interest-rate movements. Stocks dropped, interest rates rose, and precious metals fell.
February 11th: A strong jobs report sent markets lower and investors weighed in on the likelihood of the Federal Reserve not lowering interest rates. High valuations in Artificial Intelligence Tech stocks led investors to take profit, concerned with the prospects of continued growth in the sector.
February 22nd: The U.S. Supreme Court ruled against the use of the International Economic Emergency Powers Act (IEEPA) to validate the reciprocal international tariffs imposed in 2025. A flat 10% tariff on all imports was enacted in response to the Supreme Court ruling.
February 24th: New tariffs were imposed by President Donald Trump. There were fears that companies using AI-powered software would outperform companies using human workers, causing decreased profits which drove stocks lower.
February 27th: No deal is the outcome of the latest round of U.S.-Iran nuclear talks. Oil Futures spiked. Unease about the global oil supply and geopolitical uncertainty rattled energy markets.
March 5th: The U.S. and Israel continued their bombing campaign on Iran. Iran announced the Strait of Hormuz closed, with thousands of ships trapped in the Persian Gulf. Energy prices soared. Markets fell on this news and worries that the labor market is weakening. February jobless claim numbers came in lower than expected. Fear of a slowing labor market spooked investors.
March 11th: Markets slid, all eyes on the U.S.-Israel Iran war. Oil prices climb. Consumer price index increased, and inflation concerns rise.
March 18th: No cut with the Fed keeping the Federal Funds lending rate unchanged. Inflation woes are of great concern. Interest rates rise to match inflation concerns. Oil prices increased from year start of $57 to $96 today. Stock indexes tumble.
March 20th: Middle East war between U.S.-Israel and Iran continues. Major impact on crude oil and natural gas prices. Investors are anxious about higher inflationary pressures as the geopolitical conflict escalates. All 11 broad-market index sectors close in negative territory.
March 28th: Stocks skid lower, extending 5 week losing streak. Oil rockets past $100 per barrel. The 10-year Treasury Note edges near 4.5%, the highest it’s been since July of last year. Wall Street and Mainstreet brace for credit issues as commercial and consumer borrowing costs spike.
March 30th: Wall Street closed severely lower to end the 1st Quarter of 2026, torn down by worries over the U.S.-Israel Iran war. Investor acumen was clearly Bearish, with markets dropping into the correction zone based on geopolitical unease, rocketing oil prices, and increased inflation fears. All three stock benchmark indexes ended the quarter in the red and at their lowest levels in over seven months.
On the bright side, these headlines provided a buying opportunity for bond investors as interest rates spiked and prices dropped. This gave bond/fixed income investors the opportunity to lock in higher interest rates despite the Federal Reserve’s lower rate cycle agenda. Investors weighted in the energy sector were given a shot in the arm as energy stock prices pushed past their flat trading range that started in October of 2022. International Markets fared better than the U.S. as international equities finished the quarter with gains that were made in January and February. As the U.S.-Israel Iran war ramped up in March, headwinds challenged international stocks which declined alongside U.S. markets. Emerging market returns fell in sequence with the U.S., as pressure due to reliance on energy imports from the Middle East caused investors to seek safe havens in cash and bonds.
War shocked the markets this quarter. Investors gained insight into how military action, higher energy prices, and inflation all relate to drive an outcome in the equity markets that was less than desirable. These concerns are justified. As an advisor making investment decisions for you, these are the times to note where investment and life planning based on risk tolerance and need for diversification proves their worth.
We at Renew Family Wealth strive to bring you peace in the storms. If you have concerns about your situation and are looking to have an ear to hear your concerns and assist you in making sense of all that is going on around you, a shield to buffer the noise, we welcome the opportunity to serve you. Please do not hesitate to contact us. Thank you to those who bless us with the opportunity to serve you. We are sincerely grateful.
Sincerely,
Scott Miller
