Market volatility amid growing tensions with Iran.
Taking a closer look…
- Markets experienced volatility and energy prices rose amid escalating military action against Iran. US stocks saw modest declines, while international stocks fell over 5% last week.1
- Market volatility can prompt investors to act, but historically markets have recovered in the weeks and months after the onset of military conflicts. Acting too quickly in response to market volatility may cause more harm than good, as investors risk missing out on an eventual recovery.
- Gasoline prices have been rising since the start of the year. Recent developments involving Iran have added to that upward pressure, and national prices are up over 10% in 2026.2 Consumers will likely feel this at the pump. However, the increase is unlikely to significantly impact US economic growth overall, since the average household spends less than 3% of its budget on gas.
- The US services and manufacturing sectors both showed solid momentum in February, highlighting continued growth in the US economy.3
- The ISM Services PMI® marked almost 2 years of consecutive expansion, reflecting broad strength across areas like hospitality, accommodations, and financial services.
- The ISM Manufacturing PMI® also rose, indicating a second straight month of growth. A meaningful increase in new orders and customer requests for future production helped drive this improvement and signals strengthening demand.
- US employers cut around 90,000 jobs in February and the unemployment rate ticked up to 4.4%.4 The unemployment rate is still well below its long-term average and consumer spending has remained healthy. Nevertheless, the job market bears close watching, as further signs of weakness may dampen the US growth outlook.
Portfolio Manager, Strategic Advisers
“Military conflicts can create periods of uncertainty, and it’s normal for markets to react with volatility. Some investors may feel compelled to make changes in response to events in Iran. However, I believe that staying patient and disciplined is the best course of action for investors.”
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