When I used to put gas in my old 1976 Monte Carlo, it would make a gargling sound about 10 seconds before the pump shut off. I always thought it was talking to me.
Sometimes stocks can speak to us. On Monday, March 23, 2026, they told us they want to go higher but need an off-ramp from the current war in Iran.
Crude Oil prices plummeted, and stock markets rallied on the news from President Trump that the U.S. would pause bombing energy infrastructure early that morning. This pushed the S&P 500 up 75 points, the Dow Jones up almost 650 points, and Crude Oil prices down over 10% all in one day.
On the oil front, any signs of a de-escalation in hostilities over the next few days could push oil prices and refined products like gasoline and diesel even lower. However, a ceasefire or even an end to the war won’t diminish the impacts of significant supply chain disruptions and limited energy supply in the oil-rich Middle East.
The Strait of Hormuz must reopen.
For this to go from optimism to actual forward momentum, the Strait of Hormuz needs to be opened, either through diplomacy or force. Once that happens, stocks will rise and shake off volatility fears related to Iran. History suggests stock markets will rebound, possibly even rapidly, when military operations end.
Where to wait this out
The technology sector might be a good place to be while waiting for the Iran conflict to finish. Technology is down only 1.6% in March, second only to the energy sector’s 7.4% gain and significantly better than the S&P 500’s 4.3% decline. The valuations for Technology came down before the war began amid fears of AI disruption, which may put it in a position to outperform during the waning days of the conflict. Tech is trading at a 7% premium to the S&P 500 on a forward price-to-earnings basis despite analysts’ expectations for 30% earnings growth this year.
Until the war is actually finished, markets will remain caught between headline-driven optimism about potential peace and the reality of damage to flows, logistics, and inventories in the energy supply chain, which could take months to years to repair. Until the markets are fully convinced of a genuine de-escalation, stock prices will likely remain volatile. Historically, sudden external market shocks, such as wars, cause volatility, and markets often recover fairly quickly with limited long-term damage. Morgan Stanley research shows that over the past 75 years, the S&P 500 has risen by over 8% on average in the 12 months following wars.
It’s still a very fluid situation for investors. We should continue to expect market swings, not get too caught up in headlines or press releases, and, when the smoke clears, watch for the scale of damage to the global oil supply chain. This war still presents significant downside risks and the potential for negative economic impacts that investors need to navigate carefully.
I guess cars can’t really talk, but I always imagined mine did. When I heard my old Monte Carlo gurgling, I always assumed it was saying, “Sorry to be a gas guzzler, big guy.”
Have a blessed week.
Richard Baker
Opinions voiced above are for general information only & not intended as specific advice or recommendations for any person. All performance cited is historical & is no guarantee of future results. All indices are unmanaged and may not be invested directly.
All investing involves risk, including loss of principal. No strategy assures success or protects against loss.
The economic forecast outlined in this material may not develop as predicted & there can be no guarantee that strategies promoted will be successful.
Fervent Wealth Management is a financial management and services entity in Springfield, Missouri.