Financial insights for the week ending March 27, 2026
For the week ending March 27th, the S&P 500 fell by 2.12%, the NASDAQ was down 3.23%, the Dow Jones Industrial Average decreased by 0.90%, and the Russell 2000 increased by 0.46%.
Markets declined sharply this week as tensions between the U.S., Israel, and Iran continued to escalate. Throughout the week, there was ongoing talk of a potential truce or near-term agreement. The U.S. proposed a 15-point framework, while Iran responded with its own set of demands. However, as the days passed, markets began to trust the headlines less, as actions on the ground continued to point toward escalation rather than resolution. That disconnect between words and actions weighed heavily on investor confidence. At the same time, expectations around interest rates shifted. Early in the week, markets were pricing in a roughly 50% chance that the Federal Reserve could raise interest rates this year, driven by concerns that rising oil prices could push inflation higher. Gas prices alone are up 47% this year, adding to those fears. As the week progressed, those expectations began to ease. The Fed typically focuses on core inflation, which excludes food and energy, while also considering broader employment trends. As investors began to focus more on the potential long-term economic impact of the conflict, expectations for a rate hike this year fell to around 25% chance by the end of the week. That shift provided some relief as seen from the Russell 2000 showing modest signs of improvement, as they are composed of smaller-sized companies, which do better under lower-interest rate environments. This shift showed up in gold prices as well. After declining alongside stocks over the past month (immediate effects of the conflict), gold moved higher this week for the first time in several weeks, suggesting renewed demand for economic safety. This may indicate that markets are transitioning from focusing on short-term shocks to the potential for more persistent, long-term economic pressure caused by the war. Historically, the Federal Reserve responds to rising inflation by increasing interest rates and to economic slowdowns by lowering them. When both forces are present at the same time, economists refer to this as “stagflation.” In that environment, the Fed faces a difficult choice between supporting economic growth or controlling inflation. One thing is becoming clear: investors want an immediate end to the conflict, and each additional day of uncertainty increases the risk of a more difficult path forward for both the economy and the Federal Reserve.
Next week, markets will be focused on two key areas: developments in the Middle East and new economic data later in the week. In the Middle East, the primary question is whether the conflict escalates further. Markets are particularly sensitive to the possibility of U.S. troop involvement, for example. If escalation does not materialize, it could be viewed as a positive signal. However, if escalation continues, investors will likely adjust for a longer duration of the Iranian conflict and any potential damage to critical oil infrastructure, which could keep energy prices elevated. Later in the week, some attention will shift to the start of a new month and the release of March employment data. These reports will provide insights into the strength of the U.S. economy. In the current environment, markets may interpret weaker data as a potential positive. Slowing economic conditions could increase the likelihood of future interest rate cuts, offering some support to stocks. Stronger-than-expected data, on the other hand, may reinforce concerns that interest rates will remain higher for longer.
This week's financial planning tip of the week, let's keep the topic on inflation, specifically, how to avoid the prices that you pay from increasing! Here are 3 financial tips on how to rethink your shopping and buying habits to keep your own personal expenses from increasing: 1. Be Intentional with Gas Usage Gas prices can move quickly, but small changes add up. Combine errands into one trip, avoid unnecessary driving, and use apps like GasBuddy to find the lowest prices nearby. Over time, this can meaningfully reduce your monthly costs. Apps on your phone can be used to find the cheapest gas prices in your area, but don't let the apps sucker you into "deals" through their advertisements. 2. Delay and Replace, Not Just Buy Before making a purchase, ask: Can this wait, or is there a lower-cost alternative? Inflation often pushes us to accept higher prices as “normal.” Taking a pause or choosing a substitute can help avoid overpaying. 3. If prices are rising, consider locking in expenses that are predictable. This could include bulk purchasing non-perishables, securing longer-term service contracts, or switching to fixed-rate plans where available. Predictability can be your advantage in an inflationary environment.
Enjoy your day! Come back next Saturday for our latest commentary. We are here to answer any of your financial questions.