‘March Madness’ for Markets Too

The global market narrative has undergone a dramatic reversal in March 2026, shifting from a period of synchronized growth to one of heightened volatility and risk. Early in the year, a combination of cheap energy, stimulative policy, and robust AI investment fueled gains in cyclicals, financials, and international equities while inflation moderated. However, the Iran conflict and subsequent oil price shocks abruptly inverted these trends, causing energy prices to spike, global equities to underperform, and the U.S. dollar to strengthen as a safe haven. This shift has flattened yield curves and triggered a downturn in previously resilient sectors like metals and transports. With stocks, bonds, and gold currently moving in the same direction, traditional diversification is failing, likely forcing investors to reduce exposure and driving further near-term market weakness until energy flows through the Strait of Hormuz stabilize.