Over the past several weeks, the conflict involving Iran has quickly become a major focus for investors. The headlines are dramatic, and understandably so. When events escalate in a region that plays such a critical role in global energy markets, stocks, oil, and interest rates can all react quickly.
But it’s important to separate what’s happening from what actually matters most to markets. Right now, the key issue is not simply the conflict itself, but the Strait of Hormuz.
This narrow waterway is one of the most important energy chokepoints in the world. A significant portion of global oil supply moves through it every day. When markets believe that flow could be disrupted—or even temporarily closed—oil prices tend to rise quickly as traders price in potential shortages.
That’s exactly what we’re seeing.
Oil prices have moved higher not just because of the conflict itself, but because of the uncertainty around whether oil can continue to move freely through the Strait. That uncertainty is what markets are struggling with most and is why we’ve seen volatility in stocks.
Higher oil prices raise concerns about transportation costs, business expenses, and ultimately consumer prices.
When that happens, investors begin asking the next question:
Does this stay an oil problem, or does it become an inflation problem?
What Our Retirement Advisors Are Watching Next
Right now, the immediate issues for markets are elevated oil prices and uncertainty around the Strait of Hormuz.
But if this situation persists, there are potential second-order effects we are watching closely:
- Rising inflation due to higher energy costs
- Higher interest rates as bond markets adjust
- Pressure on economic growth and corporate margins
To be clear, these are risks, not current realities.
Markets are forward-looking, which means they often react to what could happen before it actually does. That’s why periods like this can feel uncomfortable. Prices move based on uncertainty and fear, not just facts.
At this point, market volatility is being driven primarily by oil and uncertainty—not a confirmed shift in the broader economy.
Reminder: Volatility Is Normal
It’s also important to keep recent market movements in perspective.
Geopolitical events often lead to sharp, emotional market reactions. But historically, those reactions tend to be short-term in nature unless they evolve into something with broader economic impact.
That’s why, in many cases, the best course of action is not to react too quickly.
Markets can decline rapidly—but they can recover just as quickly when conditions stabilize. Those turning points are extremely difficult to time.
Since 1980, the S&P 500 has experienced an average of 4 to 5 pullbacks of 5% each year. In other words, volatility like this isn’t unusual—it’s part of the investing experience.
As of the day this is written, the S&P 500 is down approximately 3.5% year-to-date and about 6% from its January peak. That’s not enjoyable—but it is within the range of what we would consider normal market behavior, particularly during periods of heightened uncertainty.
How We Are Responding
Our focus right now is simple: stay disciplined, stay aware, and avoid overreacting.
Here’s what we’re doing right now:
- Monitoring oil markets and developments in the Strait of Hormuz closely
- Watching inflation expectations and interest rates for signs of broader impact
- Stress-testing our models and evaluating portfolio exposures where appropriate
At the same time, we are not making drastic changes based solely on headlines.
If conditions evolve—if oil remains elevated for an extended period, if supply disruptions persist, or if we begin to see clear spillover into inflation and economic data—then we will adjust accordingly.
But for now, patience and discipline remain critical.
What Would Change Our View
While our current approach is to remain vigilant and disciplined, it’s important to be clear: our retirement advisors are not standing still, they are evaluating in real time.
There are specific developments that would cause us to reassess and potentially take more meaningful action, including:
- Sustained disruption in the Strait of Hormuz: If shipping remains significantly constrained for weeks—not days—and oil cannot move efficiently through the region, this becomes less of a temporary shock and more of a structural supply issue.
- Persistently higher oil prices: A short-term spike is manageable. But if oil prices move meaningfully higher and stay there, the impact begins to ripple through the global economy.
- A clear rise in inflation expectations: If higher energy costs begin feeding into broader inflation measures, it could limit the flexibility of the Federal Reserve and shift the interest rate outlook.
- Higher Treasury yields driven by inflation concerns: A sustained move higher in bond yields—particularly if driven by inflation, not growth—would be a signal that markets are repricing risk more broadly.
- Evidence of economic slowdown or earnings pressure: If higher costs begin to weigh on consumers or corporate margins, that would indicate the situation is moving beyond energy markets into the broader economy.
If we begin to see some combination of these factors develop, our positioning would likely become more defensive.
Until then, we believe it is important to avoid reacting to headlines and instead respond to confirmed changes in the data and market behavior.
The Bottom Line
The market reaction we’re seeing today is not just about the conflict itself-–it’s about the risk that disruption in the Strait of Hormuz keeps oil prices elevated and uncertainty high. That’s what markets are responding to. While the risk is real, history reminds us that reacting too quickly to fast-moving geopolitical events can often do more harm than good.
We will continue to monitor developments closely and make thoughtful adjustments as needed—but we remain focused on long-term outcomes, not short-term noise.
Are You Getting the Guidance You Need in This Market?
Moments like this can be unsettling, especially if you’re managing your portfolio on your own or not getting the level of communication and guidance you expect from your retirement advisor. It may be time to reassess your approach.
Periods like this are when thoughtful guidance and proactive portfolio management matter most. If you would like a second opinion or a clearer strategy for how your investments should be positioned, we’d be happy to have a conversation.
Click here for your Free Retirement Assessment.
Sources
[1] International Energy Agency – Strait of Hormuz and global oil flows
[2] Reuters – Recent oil price movements and market reaction (March 2026)
[3] Associated Press – Market response to Middle East tensions (March 2026)
[4] S&P Dow Jones Indices – S&P 500 performance data
[5] Clearnomics – Market and economic chartbook (March 24, 2026)
[6] BBC News – Coverage of Iran conflict and Strait of Hormuz developments
Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Investing involves risk including loss of principal. No strategy assures success or protects against loss.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.
The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.