What Did Markets Focus on in Spring 2026? Insights and Analysis

There' s a version of this letter I could have written in late March that would have read very differently from this one.

January through March delivered the sharpest monthly move in oil prices in four decades. The Strait of Hormuz (conduit for one fifth of the world's oil flows) was effectively closed. Brent crude (the main benchmark price for oil) jumped 63% in March alone.

The broad Bloomberg Commodity Index climbed 24.4% for the quarter, the best showing in years. Stocks and bonds sold off together as markets priced in a new inflation shock on top of everything else.¹

Then came a pivot. Markets recovered. Not slowly… but rapidly! By mid-April, the S&P 500 had not only erased its war-related losses but closed above 7,000 for the first time in history. The Nasdaq posted its longest winning streak since 1992.

The MSCI World Index sits roughly 2% above its pre-war level as I write this.²

The instinct is to attribute the rebound to the ceasefire and optimism at reopening of the Strait. That's part of the story, but it's not the whole story, and the fuller version is worth your attention.

What Actually Moved Markets

Prior to the Iran war, the corporate world was quietly telling a fascinating story that most headlines missed. In earnings calls across 365 S&P 500 companies, executives described an economy that was getting more productive, more efficient, and more AI-integrated, with two-thirds of industries reporting accelerated activity in the fourth quarter of 2025.

Companies had largely adapted to tariffs. AI adoption was translating into real margin protection. Here’s example: Bank of America removed 30% of its coding workload through AI tools, saving roughly 2,000 headcount equivalents. IBM doubled its productivity savings target. Freight quote times at CH Robinson went from 17 minutes to 32 seconds.³

None of that changed when Iran happened. The story not getting told was that the engine kept running. That's what the rebound was about. Analysts actually raised Q1 2026 earnings expectations during the war, forecasting roughly 13% growth (the sixth consecutive quarter of double-digit gains). ⁵ Again, a story that was missed by most… MorganStanley's Michael Wilson said "Despite geopolitical risks, the earnings recovery remains intact." AI-linked capex (capex = business reinvestment) is running at a pace that dwarfs any single geopolitical shock.

In short, markets looked forward rather than backward and concluded that business fundamentals simply mattered more than war-induced uncertainty.

What This Should (and Shouldn't) Teach Us

The lesson most worth drawing is the one about timing. An investor who sold on March 30 (the low) missed a 12% move in three weeks. There was no bell, no headline, no strategist who rang the bottom in real time. The rebound surprised professionals who watch markets for a living. That is how these episodes almost always work: the cost of being out is larger than the cost of being uncomfortable.

A Real Risk Beyond the War

I want to close with something that's been on my mind more than oil prices.

A generation of young - and not so young - investors is being sold the idea that investing and gambling are essentially the same thing. Prediction markets have grown from essentially zero to more than $25 billion in monthly volume in about two years.

A recent survey found that 80% of Gen Z respondents and 75% of millennials admitted to investing in high-risk or speculative instruments because they feel financially behind.⁸ The data on how these products actually perform is quite clear: A UC San Diego study of more than 700,000 online gamblers over five years found that more than 95% of participants were net losers. Worse yet, for every dollar that flowed into sports betting after legalization, net investment in equities fell by just over two dollars.

Tragically, those who lost the most tended to be financially constrained households… precisely the people who could least afford them.⁹ So why bring this up? Because there is a real distinction here between what Americans ought to be doing, versus what we’re being marketed to do. The distinction is between owning a claim on productive assets and future cash flows, and placing a wager designed to produce a negative expected return in the aggregate. Investing is a discipline. It involves goals, time horizons, and the willingness to sit with discomfort when a war or a tariff or a rate scare temporarily makes the discipline feel foolish.

This quarter was a reminder of why that discipline matters. The war felt like the story. But the story turned out to be earnings, productivity, and the ongoing compounding of real businesses doing real work. The people who stayed invested let that story work for them. The people who tried to outguess it mostly didn't.

As always, if any of this prompts questions — about your own positioning, your risk

tolerance, or how any of these themes apply to your plan — please reach out. That's what I'm here for.

Michael Tarascio, CFP®

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Sources

¹ J.P. Morgan Asset Management, Monthly Market Review (Q1 2026); Guide to the

Markets – U.S., 2Q 2026 edition, data as of March 31, 2026.

² CNBC, "Global stocks have recouped Iran war losses to hit fresh records," April 21, 2026; CNN Business, "Oil drops, stocks soar to wrap up a wild week," April 2026.

³ Bloomberg Economics and Bloomberg Intelligence, The Orange Book, Q4 2025

edition, drawing on earnings transcripts from 365 S&P 500 firms.

⁴ Yap Fook Hien, Standard Chartered, quoted in CNBC, April 21, 2026.

⁵ FactSet earnings estimates, cited in Northeastern University News, April 2026.

⁶ Morgan Stanley research, cited in PBS News, April 2026.

⁷ Deutsche Bank research (Jim Reid), cited in CNBC, April 20, 2026.

⁸ Charles Schwab, "Investing vs. Gambling: Why the Distinction Matters, "drawing on Dune Analytics and the 2026 Northwestern Mutual Planning & Progress Study.

⁹ Baker, Balthrop, Johnson, Kotter, and Pisciotta, Gambling Away Stability: Sports

Betting's Impact on Vulnerable Households (2024 working paper); UC San Diego Rady School of Management research on online sports gambling, cited in Charles Schwab.

This communication is for informational purposes only and reflects the views of Tarascio Financial Planning, LLC as of the date of publication. It is not intended as personalized investment, tax, or legal advice. Information from third-party sources is believed to be reliable but is not guaranteed, and citations are provided for reference only.