Traders who had donned their Dow 50,000 hats in February watched the oldest and best-known index slide into correction territory last month, shedding 10%.
Since its year-to-date peak, the tech-heavy Nasdaq retreated by about 12% at its lowest point.
The S&P 500 Index has yet to enter an official stock market correction, with a total decline of 9.1% (10% is widely regarded as the threshold for an official market correction).
But given the gravity of the situation, losses have been modest.
Table 1: Key Index Returns | ||
| March % | YTD % |
Dow Jones Industrial Average | -5.4 | -3.6 |
Nasdaq Composite | -4.8 | -7.1 |
S&P 500 Index | -5.1 | -4.6 |
Russell 2000 Index | -5.2 | 0.6 |
MSCI World ex-USA** | -10.2 | -1.5 |
MSCI Emerging Markets** | -13.6 | -0.5 |
Bloomberg US Agg Total Return | -1.8 | 0.0 |
Source: Wall Street Journal, MSCI.com, Bloomberg, MarketWatch
MTD returns: February 27, 2026–March 31, 2026
YTD returns: December 31, 2025–March 31, 2026
**in US dollars
From purely an economic perspective, let’s review three important commodities that originate in the Persian Gulf and examine how they could affect the global economy if the currently blocked Strait of Hormuz remains closed.
- Not surprisingly, the hostilities in the Middle East have dominated trading, especially as it relates to the price of oil.
According to the Energy Information Administration, about 15% of global oil and 5% of the world’s refined products exit the Persian Gulf through the Strait of Hormuz. Travel through the Gulf has slowed to a trickle, and prices reacted accordingly.
During March, the International Energy Agency estimated a shortfall of about 8 million barrels per day in March.
Some supply in the Gulf can be re-routed, non-OPEC production may rise, and emergency drawdowns from global stockpiles can bridge some of the gap.
Today, the U.S. is much less dependent on oil from the Persian Gulf (about 3–4%). Still, oil is priced globally, and the U.S. cannot fully escape the economic consequences from rising prices.
- While attention has been focused on oil, the world is also dependent on the Persian Gulf for fertilizer.
Countries exposed to disruptions account for nearly 50% of global exports of urea—a widely used nitrogen fertilizer—and about 30% of global ammonia exports, according to the U.S. Farm Bureau.
Though the U.S. does not directly import large quantities of fertilizer from the Middle East, fertilizer markets, like oil, respond to price movements in the region.
Lower global yields would likely lift food prices if the Strait remains blocked for an extended period.
- About one-third of the world’s helium comes from Qatar. It’s not simply party balloons that are affected. Helium is essential in the production of computer chips.
A prolonged shortage could have a significant impact on semiconductor manufacturing. The U.S. is the world’s top producer but would be affected by a shortage of chips.
In summary, March was marked by higher volatility yet modest losses rather than panic-driven selling, leaving markets cautious but still fundamentally supported heading into April.
Expectations that the conflict would be limited in duration helped stabilize sentiment, while a resilient U.S. economy and upbeat Q1 estimates (LSEG) provided support.
Investors also took comfort in the perception that the Federal Reserve was unlikely to overreact to a supply-driven rise in oil prices and a near-term resolution of the war. Any unwanted escalation or a prolonged conflict would likely heighten market volatility.
As the month came to a close, stocks rallied amid optimism that hostilities might soon end.
We understand the events in the Middle East may be concerning. As always, we encourage you to reach out if you have questions, concerns, or simply want to talk through what this means for your personal financial goals.
We’re here to provide clarity, perspective, and guidance, especially when the news feels overwhelming.
I trust you found this review to be insightful. If you have any questions or simply want to talk through your portfolio or other financial goals, please don’t hesitate to reach out to me or anyone on our team.
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