Corrections, Conflict, and Continued Uncertainty

SAS Financial Advisors LLC | Mar 27, 2026

As outlined in the newsletter a couple of weeks ago, we reviewed market movements during war and then 1 year later, demonstrating that investing based on wars is not an effective strategy. Given those results, we are only 3 weeks into the war with Iran, so we do not have the wisdom of 1 year later.

Today the Nasdaq entered correction territory, meaning a 10% decline from the recent high.

Index	2026 All-Time High	Current Level	% Decline
Nasdaq Composite	23,988	21,550	-10.16%
MSCI Emerging Markets	1,626	1,446	-11.07%
MSCI EAFE (Developed Ex-US)	3,193	2,863	-10.33%
S&P 500	7,150*	6,477	-9.41%
Russell 2000 (Small Cap)	2,735	2,493	-8.85%
Dow Jones Industrial (DJIA)	49,815	45,960	-7.74%

We are pretty close to a correction in all the major indexes, and international developed and emerging markets have entered correction territory.

As we noted recently in Markets, War, and Economic Uncertainty, market reactions to war, inflation, and weakening employment data can create a difficult backdrop for both investors and policymakers.

References to the TACO trade (Trump Always Chickens Out) are increasing. So are mentions of a recession, although recession is still at the bottom of the list of risks. However, with interest rates heading higher, inflation numbers continuing to run hotter than desired, and the risk of a slowing economy, markets are concerned about stagflation.

Mortgage rates are now at their highest this year. The end of the Iran war does not seem to be in sight either. Although, based on impulsiveness, lack of planning, and market reaction, the war could end anytime with no winner. It is not a unilateral decision. Israel, Iran, and the US all have a say.

We have discussed this kind of backdrop before in “Stagflation” & Tax Deadlines and Is the Economy Weakening?, where uncertainty around inflation, rates, and growth continues to complicate the outlook.

Another big event this week was a jury decision holding social media companies responsible for causing mental illness in young people. The stocks reacted mildly right after the decision, but today, Thursday, the reaction was bigger. Of course, markets also had their worst day of the year today, Thursday. There are thousands of lawsuits in the wings to make the social media companies pay big.

For more on that broader issue, see Beyond the Markets: Parenting, Mental Health, and Social Media.

Talk about inflation, Netflix is raising prices for all tiers of service as it introduces live events and invests in new content. This is not because of tariffs or oil, just inflation.

The AI bulldozer could be slowed down by local resistance to server farms across America. Local communities are finding the economics not tempting enough to balance the other risks, like increased utility costs and environmental damage.

Here’s hoping the damage is limited as we approach the end of the first quarter next week.

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