When I was in high school, the baseball team on the north end of our county had a pitcher with a killer 12-6 curveball. He made us look silly with our big swings and misses. That is, until we figured out his signs and started hitting him hard. We could be seeing signs right now that might help us hit some stocks out of the park.
As the first quarter of the market year comes to a close, it looks like the stock markets have endured this current difficult stretch. The strong momentum that drove stocks to record highs in a low‑volatility environment at the beginning of the year faded quickly amid concerns about AI spending and a war in the Middle East that disrupted oil markets. The Venezuela incident was completely insignificant to the markets (my Poppy would say, “like a fly on a dog’s butt.”) Whereas the war in Iran in late February, with its near-closure of the Strait of Hormuz, triggered a global oil supply shock, driving prices to multi-year highs.
It seems like stocks want to go higher. We see this by the market’s reaction to any slightly positive headline about the war ending soon. For example, the market jumped almost 3% when President Trump said the U.S. would be open to ending this conflict before the Strait of Hormuz is opened.
This might be a good entry point to move cash still in money markets into stocks, with the S&P 500 starting off April down over 6% from its high. Over the past 80 years, the market has weathered 26 geopolitical events, and in the 12 months following each, the S&P 500 has historically gained an average of almost 8%, according to LPL research.
Stocks did struggle during the last few weeks of the first quarter. The S&P 500 ended with five straight weeks of declines, and until the big rally on the last day of March, it was getting closer to correction territory. Although oversold conditions are emerging, most indicators haven’t yet signaled an extreme bottom, which investors view as a buying opportunity. As of Friday, March 27, 2026, only about 11% of S&P 500 stocks looked oversold on the Relative Strength Index (RSI), which is a lot less than the over 50% we saw last April.
I’m getting excited about the market for the rest of the year. It seems like a repeat of last year if you substitute the tariffs for a war in Iran. The long‑term backdrop for stocks hasn’t fundamentally changed, supporting a continuation of the current bull market. Volatility is part of investing and even more so in the last third of a bull market.
Markets are still waiting for the U.S.‑Iran war to end and won’t really start to run until the Strait fully reopens. Until the Strait is fully opened, short-term market risks will persist, but the longer‑term market fundamentals are encouraging. On top of that, the stock market’s historical performance during wars and other geopolitical events is cause for optimism.
The Blue Jays coach would sit on a bucket just outside their dugout, and we started noticing that he would clasp his hands, elbows on his knees, and raise his hands to his chest every time their pitcher threw his curveball. Once we learned to watch for the indicator, we started turning things around and went on to win the game. Hopefully, these current market indicators will help us win the market game as well.
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.