Market Recap - Week of March 16 - 20, 2026

Gordon Achtermann
Mar 24
4 min read

The S&P 500 index fell 1.9% this week, marking its fourth weekly loss in a row, as the war in Iran continued.

The S&P 500 ended Friday's session at 6,506.48. The index has lost 5.4% in March and is down 5% for the year to date.

Trump and Netanyahu's war of choice with Iran neared the three-week mark with no clear end in sight. The US sent more Marines to the Middle East while Iran's new supreme leader said "safety must be taken away" from the country's top enemies. Oil prices have climbed as the Strait of Hormuz remains effectively closed, disrupting energy supplies and triggering inflation concerns.

Data released Wednesday showed US producer prices rose at the fastest pace in seven months in February amid notable spikes in wholesale costs of food and energy, as markets braced for higher inflation due to the Iran war.

Also on Wednesday, the Federal Reserve's Federal Open Market Committee kept its monetary policy steady amid uncertainty around the Middle East conflict. "The implications of developments in the Middle East for the US economy are uncertain," the FOMC said Wednesday.

Most sectors in the S&P 500 fell this week, led by a 5% loss in utilities and declines of 4.5% each in materials and consumer staples.

Mosaic (MOS) had the largest percentage loss of the week in materials, sliding 20%. The fertilizer company is faced with a delay in margin expansion from rising raw material costs due to the conflict in Iran,

Natural gas is the highest cost input for fertalizer, so the cost increase due to the war will flow through to increase the price of food worldwide.

Last Week’s Economic Reports

The February producer price index rode 0.7% over the last month, Burried in the details, food up 2.4% in that one month.
February industrial production was up 02% after a 0.7% increase last month.
Pending home sales were up 1.8%, beating expectations.
Also, the Federal Open Market Committee decided to hold interest rates steady.

Up Next

Economic data will include a revised report on Q4 productivity, the February import price index, and a final reading on March consumer sentiment.

S&P 500 Stylebox and Sector Returns

Once again, I'll note that so far this year, value is the only side of the stylebox in posative territory.

How to read the stylebox: The horizontal axis represents investment style, which can be value, blend, or growth for stocks and mutual funds. The vertical axis represents market capitalization for stocks, categorized into large, medium, and small companies. The number in each box represents the percentage growth of the category at the intersection of the column and row. For example, large-cap value is in the top-left corner box of the 9 boxes, so the large-cap value category is up (or down) by the percentage shown in that box.

Thought of the Week

2026 is less than three months old, but it’s already been through a lot. So far in the first quarter, software, the S&P 500’s second largest industry, fell by 20% due to AI getting better and better at coding, the Supreme Court struck down IEEPA tariffs, plunging global trade back into uncertainty, and Trump and Netanyahu started a war in the Middle East. Consequently, oil prices rose by 70%, and markets shifted from pricing in two Fed rate cuts in 2026 to a 50% chance of a hike. Yet through it all, the S&P 500 is only down 5%. Beneath the surface, these events are roiling company, sector and factor volatility. But, as this week’s chart shows, dispersion* is widening, which may be insulating the index. The average rolling 3 month pairwise correlation among stocks in the S&P 500 is 13%, lower than it’s been 98% of the time since 2022.

Divergences in the AI story are a major driver. Application companies in software, wealth management and law, to name a few, are down double digits, but pick and shovel industries like semiconductors and electrical components are still strongly positive, with the average stock up 13% YTD. Even the hyper scalers are not immune; their average rolling 3-month pairwise correlation is down to 23% versus an average of 56% from 2023 to 2025. But increasing dispersion isn’t just about AI. At the sector level, the Middle East conflict may be responsible for the second widest YTD performance dispersion since 2002. A beneficiary has been the energy sector, which is up 33%. Financials, on the other hand, are down 11% as the yield curve has dramatically flattened, which hurts net interest margins, and geopolitical uncertainty is threatening the IPO and M&A resurgence. For index investors, this increase in dispersion offers protection from volatility, but for active managers, it’s also an opportunity to outperform.

*dispersion measures the how differeently indicvidual assets perform relative to the average return of a portfolio or index.

Source: JP Morgan (edited)

Thank you to all who attended this month's market Update webinar!

You can watch the replay here:

Iran War Spikes Oil Prices & Netflix Ditches HBO Merger – Monthly Market Update Webinar – March 2026

The episode is also available wherever you listen to podcasts!