The events of March 2026 clearly demonstrated how quickly market expectations can diverge from geopolitical reality. Last week on the American stock market was not just 'red'; it became a cold shower for those who hoped for price stabilization and a soft landing of the Fed's cycle. The S&P 500, Dow, and Nasdaq indices recorded their third consecutive week of losses, reacting not to company reports but to updates from the front lines.
Rockets instead of dividends / The main 'bear' of the week has been Defense Minister Pete Hegseth. On Friday, he announced the transition of operation 'Epic Fury' into its most aggressive phase. According to the Pentagon, the combined forces of the USA and Israel have already struck more than 15,000 targets in Iran.
The actual blockade of the Hormuz Strait, which has lasted for 12 days, has transformed from a temporary threat into a long-term factor. Insurance companies (P&I) have begun to massively withdraw policies for vessels in the region, which has practically zeroed traffic through the strait. Brent oil has stabilized at 2022 levels, and Qatar has declared a force majeure on LNG supplies. In such conditions, the market has stopped believing in a quick curb on inflation.
The paradox of bonds or when bad is really bad. The standard logic of investors — 'a weak economy means low rates' — no longer holds. Revised GDP data for the fourth quarter shocked the market: growth was only 0.7% (instead of the initial 1.4% and the expected 1.5%). The reasons were trade tariffs and the consequences of the recent shutdown.
Under normal circumstances, bond yields should have fallen, but they jumped to 4.27%. Investors fear that the USA will face classic stagflation: economic stagnation while energy prices surge and massive budget spending on war. Now the market is pricing in just one symbolic rate cut for the entire year of 2026.
Icons of style and the liquidity crisis. The tech sector has lost its last trump card — management stability. On Thursday, March 12, Shantanu Narayen, who led Adobe for 18 years, announced his departure. Against the backdrop of the company's stock falling by 23% since the beginning of the year and increasing competition from AI startups, this news triggered a 7.6% collapse in Adobe's shares.
At the same time, problems began in the financial sector. Morgan Stanley limited payments to investors from its private credit fund North Haven PIF after withdrawal requests exceeded 10%. This is a troubling signal: the 'bubble' of private debt that has fueled the growth of software companies for years has begun to deflate under the pressure of high rates.
The consumer is in depression. The University of Michigan's consumer confidence index has fallen to 55.5. The average American is now more frightened by gas prices than by missile strikes. Expectations for personal finances have collapsed by 7.5%, and car sales (down 3.2%) indicate that the savings mode is already on.
What’s next? Next week, Jerome Powell will hold one of his last meetings as head of the Fed. He is not expected to change rates (they will remain in the range of 3.5%–3.75%), but rather to present a clear plan: how the regulator intends to combat the energy shock without completely collapsing the slowing economy.
The USA has entered a zone of stagflation risks. Energy independence gives America an advantage over Europe, but it only softens the blow, not cancels it. The market must acknowledge: classic indicators of overvaluation and chart patterns are now secondary. Reports from the conflict zone have taken center stage, and they will determine asset liquidity in the coming months.
This material is analytical in nature and is not an individual investment recommendation.