After a strong start to the year, markets experienced a meaningful but orderly pullback. The Dow Jones Industrial Average declined roughly 10% from its peak, briefly entering correction territory. The Nasdaq Composite fell approximately 12% at its low, while the S&P 500 approached—but did not quite reach—the technical definition of a correction, down about 9.1% at its trough.
Despite these headlines, it’s important to emphasize that the nature of this decline has been measured, not panic-driven.
A major driver of volatility has been geopolitical tension in the Middle East, particularly surrounding the Strait of Hormuz—a critical artery for global trade. Roughly 15% of the world’s oil and 5% of refined petroleum products flow through this corridor.* Disruptions led to a temporary supply shortfall estimated at nearly 8 million barrels per day in March, pushing energy prices higher.
Beyond oil, two lesser-discussed but equally important inputs have been at risk:
- Fertilizer: Nearly 50% of global urea exports and 30% of ammonia exports originate from the region. Prolonged disruption could elevate global food prices.*
- Helium: About one-third of global supply comes from Qatar, a key input in semiconductor manufacturing. Any sustained shortage could ripple into the technology sector.**
While the U.S. is less directly dependent on these imports than in prior decades, global pricing mechanisms mean we are not insulated from these effects.
Encouragingly, as we move into April, markets have responded positively to the announcement of a ceasefire in the region. The easing of tensions has already led to a pullback in oil prices and a corresponding rally in equities, particularly in areas that had been most pressured during the escalation.
This reinforces an important principle: markets often react swiftly to both risk and resolution.
Additionally, underlying fundamentals remain supportive. The U.S. economy continues to show resilience, and early Q1 earnings expectations have been constructive. Investors have also taken comfort in the view that the Federal Reserve is unlikely to overreact to what appears to be a supply-driven inflation shock.
That said, we remain watchful. Any re-escalation or prolonged instability could reintroduce volatility. However, periods like this often create opportunities for disciplined, long-term investors.
Our approach remains consistent:
- Stay diversified
- Focus on high-quality assets
- Avoid reacting emotionally to short-term headlines
- Position portfolios to participate in recovery while managing risk
We understand that geopolitical events and market swings can feel unsettling. Please know that we are actively monitoring developments and positioning portfolios with both prudence and opportunity in mind.
If you have any questions, would like to review your portfolio, or simply want to talk through what this means for your financial plan, we are always here for you.
Thank you for the continued trust you place in our team. It is a privilege to serve as your partner in navigating your financial future.
April 2026
Sources: *Amid regional conflict, the Strait of Hormuz remains critical oil chokepoint – U.S. Energy Information Administration (EIA); **FB.org Middle East Tensions Raise Spring Planting Concerns | Market Intel | American Farm Bureau Federation; *** Forbes Helium Crisis Tightens Grip On Global Chip Supply Chain
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.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
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.
