Asset Management
03/16/2026 Market Strategy
March 16, 2026
It Don’t Come Easy
Navigating Markets in Times of Uncertainty Means Keeping a Level Head
Key Takeaways
- The war in the Middle East, which has brought uncertainty to global markets over the last two weeks, is likely to remain a key concern for the markets’ near -term outlook.
- Crude oil prices have risen 47% since the end of February, as key shipping lanes through the Strait of Hormuz (through which a fifth of the world’s oil and LNG pass) are disrupted.
- We expect the Fed to remain on hold at this week’s FOMC meeting as it ponders the effects of the conflict in the Middle East on the economy and with inflation still sticky.
- The trade -weighted dollar index rose 1.1% last week on flight to quality flows even as US bond prices fell sharply on inflation concerns, sending the yield on the 10 -year note 14 basis points higher to 4.28%.
- S&P 500 Q4 earnings season is finishing up with strong results. With all but three companies having reported, earnings growth has reached 13. 6% on back of revenue gains of 9. 2 %.
- Last week’s consumer price index data for Feb. and PCE deflator data for Jan. showed inflation pressures remaining roughly steady, neither accelerating nor decelerating.
Markets remain under pressure entering the third week of conflict in the Middle East on concerns about the war with Iran and the spike in oil prices caused by the disruption of shipping through the Strait of Hormuz, through which about 20% of the world’s crude oil passes. Through March 1 3, oil prices have spiked 4 7% since the end of February as Iran has threatened to mine the Persian Gulf.
The recent jobs market data in our view could see the Fed cutting by a quarter of a percentage point sometime in the June quarter should weakness become more pronounced.
Last Week
The Dow Jones Industrial average, the S&P 500, the NASDAQ Composite, the S&P 400 (mid-caps), the S&P 600 (small caps) and the Russell 2000 (small caps) respectively shed 1.99%, 1.6%, 1.26%, 2.03%, 2.25%, and 1.79% on the week ending last Friday.
The Dow Jones Industrial average, the S&P 500 and the NASDAQ Composite on a year-to-date basis as of the close last Friday stood respectively lower 3.13%, 3.12%, and 4.9%.
In contrast the S&P 600 (small-cap) and S&P 400 mid-cap indices show respective gains in the same period of 1.2% and 1.1% while the Russell 2000 (small-cap) index shows a decline of 0.7%.
S&P 500 Q4 results last week continued to surprise to the upside as Q4 earnings season draws near a close. As of last Friday, Q4 S&P 500 Q4 earnings are finishing up with strong results.
With all but three companies having reported, earnings growth has reached 13.6% on back of revenue gains of 9.2%. Ten of the 11 sectors saw their earnings grow in the period, with four at double-digit rates (industrials, technology, materials and financials). Just one sector is seeing its earnings decline (consumer discretionary) in Q4 earnings season.
In the December quarter 74% of firms beat their analyst estimates. Just three firms remain to report this week.
Fed’s FOMC Meeting This Week
Key to the market’s focus this week will be the Federal Reserve ’s interest rate decision on Wednesday. Our expectation is for the Fed to remain on hold as it ponders the effects of the conflict in the Middle East on the economy with inflation still above their target rate.
The recent jobs market data in our view could see the Fed cutting by a quarter of a percentage point sometime in the next quarter should weakness become more pronounced.
Geopolitics Remains on the front burner
We expect traders and investors to stay focused on any and all developments in the conflict with Iran.
We suggest investors stay the course
As professional investors in periods of heightened uncertainty like these we are reminded that patience is a virtue particularly for intermediate - and long -term investors. The adage to favor “time in the market rather than trying to time the market” has served investors well.
The courage of investors’ convictions is key in our view in periods like this. Right-sized expectations serve well in our view until things get sorted out. Allowing time for cooler heads to prevail has helped navigate troubled waters over the years in our experience.
Keep current market volatility in perspective given the markets and the economies recent strength and resilience over the last three years and consider the support that resilience in economic data, corporate results, and the consumer can provide even during periods of economic slowing and market volatility. Our expectations are for volatility to persist intermittently until a clearer picture of the outcome of the war emerges.
Markets this year have experienced a tendency for near -term, day -to -day and week -to -week churning effects as traders’ position and reposition to meet the challenge of markets that one day favor a risk-off allocation and the next day favor positioning toward risk assets.
For investors with intermediate-to longer-term goals and objectives, the current period, in our view, favors portfolio diversification with an emphasis on quality.
We believe one should know what one owns; why one owns it and have right -sized expectations for how what one owns will respond to volatility. Exercising patience and staying focused on longer -term objectives can help to avoid being whipsawed.
We suggest investors consider seeking out “the babies that get tossed out with the bath water” in market downdrafts rather than blindly buying the dips and try to maintain a clear head and the courage of their convictions amid day -to - day uncertainty to avoid missing the signal for the noise.
Our intermediate and longer-term outlook for the US economy and the stock market remains overall bullish. We believe US economic fundamentals remain on solid footing. As the drag of tight monetary policy eases, job gains, consumption growth, and business fixed investment demand should persist resilient.
We anticipate continued positive corporate earnings growth, a key driver of equity valuations. The results from the S&P 500’s Q4 earnings season have well exceeded bottom-up analyst estimates surveyed prior to its start.
In our portfolios and recommended allocations, we continue to favor stocks over bonds with an emphasis on US securities while maintaining meaningful exposure to developed international and emerging-market stocks.
Among sectors, we continue to overweight cyclicals over defensive stocks and favor technology, consumer discretionary, communication services, industrials, and financials.
Name:
John Stoltzfus
Title:Chief Investment Strategist, Oppenheimer Asset Management Inc.
John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business, and other notable networks.
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