Five Weeks Down—and Still No Answers

For the week ended 3/28/26

Normally, I’d kick things off with last week’s economic data. This week? Not much to see there. Instead, markets are doing what they always do when uncertainty spikes – overreact first, ask questions later. And the source of that uncertainty is obvious: the escalating situation in the Middle East. Markets don’t need outcomes, they just need ambiguity. And right now, we’ve got plenty of it.

Let’s address the elephant stomping around the room. The S&P 500 just logged its fifth straight weekly loss. While it hasn’t officially crossed into correction territory yet, the Dow and Nasdaq didn’t wait around for permission – they’re already there, down more than 10%. Between ongoing questions around Iran, troop buildup, and whether diplomacy is real or just theater, investors have understandably hit the “sell first, think later” button.

Last week alone, U.S. stocks dropped another -2.1%, bringing the year-to-date decline to -6.7%. International stocks are still clinging to a modest +1.9% gain for 2026, though that cushion is shrinking fast. And crypto? Let’s just say it continues to live up to its reputation – high volatility, low sleep quality.

But here’s the bigger issue – and frankly, the more annoying one – bonds aren’t helping. Year-to-date, fixed income is down about -0.8%. Not catastrophic, but certainly not doing its job as a portfolio stabilizer. When stocks fall, bonds are supposed to act like the adult in the room. Instead, they’re acting like the friend who joins you in bad decisions.

The culprit is rising yields. The 10-year Treasury closed the week at 4.4%, its highest level in eight months, while the 20-year is knocking on the door of 5%. Translation: markets are increasingly concerned about persistent inflation, ballooning deficits, and the growing likelihood that “higher for longer” isn’t just a catchy phrase – it’s reality. As we’ve seen before, rising rates and falling bond prices go hand-in-hand. No mystery there – just uncomfortable math. 

And yes, this is bleeding into housing. The average 30-year mortgage rate has climbed to 6.4%, the highest since last fall. That doesn’t exactly scream “housing rebound.” Expect continued stagnation – or worse, depending on your zip code.

So where does this leave us? In the same place we always are during moments like this: waiting on the consumer. This week brings Consumer Confidence and the latest unemployment report – two data points that matter more than most. If the consumer holds up, the economy likely follows. If not…well, markets won’t be subtle about it.

Until then, may your March Madness bracket outperform your portfolio.

Good morning.

Interesting data point of the week.

Source: Visual Capitalist

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