Things you need to know
- Stocks get whacked for another week.
- 4 of 7 indexes now in the Correction zone.
- Geo-politics and the middle east continue to drive the action.
- Oil up, Gold stuck, Bonds down, Yields kissing the danger zone.
- Try the Pasta Ponza
Wake Up — It’s Go Time!
Stocks ended last week on the defense as investors grappled with a toxic mix of rising energy prices, geopolitical tension in the Middle East, the weekend – which always leaves some investors anxious and interest rates that simply refuse to cooperate. Friday, March 27, 2026, was a bruising day for the bulls, as a “perfect storm” of geopolitical tension and rising rates sent the major averages sliding. It wasn’t just a bad day; it marked the fifth straight losing week for the S&P, the longest streak of declines in over a year.
Here is how the indexes ended the day –
The Dow fell sharply on Friday, dropping more than 793 pts or 1.7%, the S&P lost 108 pts or 1.7%, the Nasdaq got whacked – falling 460 pts or 2.2%, the Russell lost 43 pts or 1.7%, the Transports gave up 195 pts or 1.1%, the Equal Weight S&P lost 102 pts or 1.3% while the Mag 7 – took it on the chin – losing 813 pts or 2.8%.
Four of the seven key indexes are now officially in correction territory.
Dow: down 10.5% from its high
Nasdaq: down 12.8%
Russell 2000: down 10.6%
Mag 7: down a whopping 17.3%
But once again — the real story isn’t just the indexes. It’s what’s happening under the hood. The Internals Tell the Story – The selling pressure (FROM THEIR HIGHS) has been concentrated in the mega-cap tech names. I mean look at it – NVDA – 20%, MSFT – 36%, TSLA – 27%, GOOG -21%, AMZN – 22%, AAPL -14%, CRM – 40%, NOW -53%, AMD – 25%, AVGO – 27%. ASML – 15%, AMAT – 15% – most of those names are in BEAR mkt territory – marked by moves greater than 20%. And that is only a sample of names under pressure.
And while it feels ugly – a look at ytd sector performance suggests otherwise.
Energy + 40%, Basic Materials + 7%, Utilities + 6.9%, Consumer Staples + 6.4%, Industrials +2.7%, while Real Estate is flat on the year. On the flip side – we see Healthcare – 7.4% (which is a bit odd to me), Communications – 11.3%, Tech – 11.6%, Consumer Discretionary – 12.2% while Financials are getting clocked down 12.6%.
The Mag 7 has dragged heavily on the cap-weighted S&P, while the Equal Weight S&P has held up noticeably better, confirming that this is not broad economic panic selling, but rather a repricing of the most crowded trade (tech) in the market.
And that distinction matters.
When the cap-weighted index falls more than the equal-weight index, it tells you investors are trimming exposure to the biggest names that drove the rally over the past two years. As of this morning the S&P is down 7% YTD and 9.2% off its all-time high, the Equal Weight S&P is down just 1.3% YTD and 7.8% off its high
That is a meaningful difference.
Meanwhile, the Dow Transports — still up about 4% on the year — have held up relatively well, which from a classic Dow Theory perspective suggests the economic outlook itself has not collapsed. Remember what Dow Theory tells us. If the economy were truly rolling over, Industrials and Transportation stocks would both be getting crushed, but they are NOT. Industrials are up 2.6% while the Transports are up 4% – hardly a disaster.
And that tells me something important. The economy isn’t falling apart. What we are seeing instead is a repricing of risk — not an economic collapse. And in stocks, what we are witnessing is a re-positioning adjustment… not a wholesale bail-out of equities.
Now another issue that is happening is something that not a lot of people are talking about – It’s called Quarter End Window Dressing.
At the end of the quarter portfolio managers clean up their books. They sell the losers (think tech), so clients don’t see them in the portfolio report — and they buy the winners (or the names that are expected to outperform – think Consumer Staples, Utilities, Energy) so the portfolio looks better on paper. That’s called window dressing, and it can create short-term pressure on certain stocks.
Why this matters
These trades are not driven by fundamentals — they’re driven by optics and that means stocks can move for reasons that only make sense in the short term. Weak stocks get pushed lower than they should. For investors watching the tape, it’s important to recognize that late-quarter volatility can be mechanical rather than meaningful.
But once the calendar flips to the new quarter, those reporting pressures disappear. Portfolio managers no longer need to worry about what their holdings look like in the report. The forced selling in laggards often stops. Natural buyers may step back into stocks that were oversold (mispriced) during the window-dressing period and as a result, the market often sees a normalization of trading flows in the new quarter.
Ok – now back to the chaos being created by the geo-political drama…..
The VIX surged to 31 its highest level in months. That matters because a VIX above 30 suggests that fear is dominating trading. Systematic strategies, volatility-targeting funds, all reduce equity exposure, which can and does accelerate market declines. Algo’s only amplify those moves – and make it more painful. This morning the VIX is down 17 cts at 30.86…suggesting ongoing anxiety.
Geo-politics continue to be the catalyst – and it’s not just about oil……
Oil has been a key macro driver. WTI surged and kissed $100 while Brent ended the day at $112.50. This morning – oil is up yet again…. WTI trading up $1.50 or 1.5% while Brent is trading up $2.50 or 2.1%.
Now, everyone is talking about oil moving through the Strait of Hormuz and what that means for the global economy — but fertilizers may actually be the bigger story. A huge portion of the world’s nitrogen fertilizers move through that same corridor. If those shipments are disrupted and right now they are, farmers from India to the U.S. will suddenly face shortages, crop yields will fall, and food prices will rise. So, the Strait of Hormuz isn’t just an oil story — it’s a potential global food inflation story.
Meanwhile bonds came under pressure on Friday, with both the TLT and TLH trading lower — down 0.6% and 0.3% respectively, sending yields higher.
By the close, the 10-year Treasury was yielding 4.42%, while the 30-year finished at 4.96%. This morning those yields are backing off slightly, with the 10-year at 4.39% and the 30-year at 4.92%, leaving them just below the danger zone of 4.5% and 5% respectively.
Remember — those are not just random numbers. They are important psychological thresholds for markets. When the 10-year pushes through 4.5% or the 30-year breaks above 5%, it typically triggers another round of selling as higher borrowing costs begin to pressure valuations. Now personally, I’m in the camp that stocks have already reacted to the idea that rates could move higher, and because of that I do not believe equities will come under significant additional pressure even if we briefly trade through those levels.
Gold, meanwhile, continues to search for its footing. This morning it is up $40 to $4,530, placing it right in the middle of an important technical range — between its long-term trendline near $4,120 and its intermediate-term resistance around $4,630.
The ongoing geopolitical tension continues to push some investors toward gold as the “safety trade.” But at the same time, the stronger dollar is creating a headwind, prompting others to take profits. The result?
Gold is stuck for the moment — locked in that trading range as the market weighs safety demand against currency strength.
Meanwhile, the U.S. dollar continues to strengthen. This morning the Dollar Index is up 16 cents to $100.32, now attempting to break above the early-March high of $100.54. A clean breakout above that level could easily see the dollar extend toward $102. But if the dollar fails to push through resistance, it will likely remain locked in the $98.60 – $100.54 range that has defined trading for much of the past several weeks.
Now, in the end — the pressure on bonds, the strength in the dollar, and the bid under gold — is really a reflection of one dominant macro story right now…energy, food and geopolitics.
We are now entering the second month of this conflict, and global markets overnight and early this morning are mixed — with headlines continuing to drive the action. Late last week we began hearing chatter that Trump could move to seize Kharg Island, Iran’s primary oil export hub, in an attempt to control the flow of oil through the Persian Gulf.
Now that rumor first surfaced on Friday and helped send stocks lower as traders tried to handicap what a move like that might mean for the region and for global energy markets. As of this morning nothing has happened.
But that does not mean it’s all quiet on the Western Front — because it isn’t. Over the weekend the Houthis in Yemen entered the fray, launching missiles toward Israel and threatening additional attacks against both Israel and U.S. interests.
And that matters. Because every time another player gets pulled into this conflict the risk of regional escalation rises, and that is exactly the type of headline that keeps traders nervous and algos on edge.
Last night – Asian markets ended the day lower across the board. The Kospi – 3%, Japan – 2.8%, Taiwan – 1.8%.
European markets are mixed. The UK is up 0.5% and Spain is up 0.3%, the other markets across the zone are all lower – Germany the biggest loser – down 0.2%.
And US futures were all down overnight but has since recovered and at 6 am are all higher. Dow futures up 150 pts, the S&P’s up 23, the Nasdaq up 68 and the Russell is up 10. My interpretation is that the market is betting on an end to this conflict – sooner rather than later. And for Trump’s sake – that has to be true. If not
The S&P has now decisively breached the long-term trendline at 6,634, ending the week at 6,368 — down 108 points, pushing us further into the abyss. This puts us back at July 2025 levels.
The chart now tells us it has to hold here. If it does not, there are two possible outcomes. First — we could trade down toward the lower July 2025 range near 6,230. And if that level fails to hold, then brace yourself for a potential move toward 6,000, which would represent roughly a 14% decline from the highs.
Now before everyone starts panicking, remember something important. A move like that would still be historically normal during a mid-term election year. In fact, history tells us that the average drawdown during mid-term years can approach 19%, so while it may feel uncomfortable, it would not be unprecedented. And that’s why it is critical not to confuse volatility with collapse.
Markets routinely overshoot to the downside when uncertainty rises — geopolitics, interest rates, elections — you name it. But once the selling exhausts itself and investors begin to see through the noise, those same markets have a habit of snapping back just as quickly. So, while the chart is clearly warning us that more downside is possible, it is not yet telling us that the bull market is over.
What it is telling us is that volatility is back… and discipline matters now more than ever. Call me at 561-931-0190 and let’s talk about risk and reaching your goals.
Take good care,
Kp
[email protected]
Source: Bloomberg, CNBC, Reuters, Wall Street Journal
This media segment contains general market commentary based on publicly available information and is provided for informational and educational purposes only. It is not intended as, and should not be construed as, investment advice or a recommendation to buy or sell any security.
Any references to specific securities, asset classes, market levels, technical indicators, or sectors are provided solely for illustrative purposes to support market commentary. Such references do not represent recommendations and should not be interpreted as reflecting the performance of any SlateStone Wealth, LLC investment strategy, portfolio, or client account. Past performance of any referenced security or index is not indicative of future results.
Forward-looking statements, including projections of market levels, technical support or resistance ranges, economic outcomes, or potential market reactions, are based on current opinions and assumptions and are subject to change without notice. Actual results may differ materially. Investing involves risk, including possible loss of principal.
Discussion of market opportunities, valuation compression, or sector rotation does not imply that any particular investment is suitable for any specific investor. Investment decisions should be made based on an individual’s objectives, financial situation, risk tolerance, and time horizon.
The firm and its clients may hold positions in securities discussed, and such holdings may change at any time without notice.
Advisory services are offered through SlateStone Wealth, LLC, a registered investment adviser. Registration with the U.S. Securities and Exchange Commission does not imply a certain level of skill or training. An advisory relationship is established only pursuant to a written agreement. For additional information regarding our services, fees, and conflicts of interest, please review our Form ADV Part 2A, available at www.adviserinfo.sec.gov or upon request.
If you contact our firm to request a consultation, any discussion would be preliminary in nature and would not constitute personalized investment advice unless and until an advisory agreement is executed.
Pasta Ponza – Made famous by Giada!
Ponza is the largest island in the Pontine Island archipelago. It is located in the Tyrrhenian Sea off the coast of Italy – and sits between Civitavecchia and Naples. The population swells in the summertime going from 3000 people to 20,000.
Here is what you need: 1 lb. of ziti, Cherry tomatoes sliced in half, capers, drained and rinsed, Pecorino Romano cheese, parsley, Italian seasoned breadcrumbs, s&p and olive oil.
Begin by bringing a pot of salted water to a rolling boil.
Preheat your oven to 375 degrees.
In a large baking dish – add the tomatoes, capers, – season with s&p. toss with a bit of olive oil. Next top with the breadcrumbs and drizzle with more oil. Bake for 30 mins or until the tomatoes soften and the breadcrumbs turn golden brown – do not burn.
When the tomatoes are done – add the pasta to the pasta water and cook for 8 mins.
Using a slotted spoon – add the pasta to a large bowl. Add in the tomato and caper mixture. Toss. Now add a handful or two of Pecorino Cheese and the Parsley. Add in a ladle of the pasta water to moisten.
Buon Appetito.