Macro4Micro: Market Commentary

JOLTS March 2026: Openings Down, Hires Up, Layoffs/Discharges Up 5-5-26

Synchrony Financial: Favorable Consumer Credit Signals 4-24-26

The US as an Aspiring Emerging Market: Fiscal SNAFU, Political FUBAR 4-6-26

Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

Market Commentary: Asset Returns 5-26-26

Glenn Reynolds, CFA — Tue, 26 May 2026 23:15:00 GMT

The wild swings in oil continue with some UST gyrations that will face a fresh round of PCE data this week along with an update of 1Q26 GDP.
The “game theory” (a euphemism) of the Trump-Iran to-and-fro process continues with concerns around a ticking clock still very significant to the world economy but also to what the lag effects will be for oil prices and thus the UST curve shape. For now, the odds of a cut in 2026 are framed at 0%.
The semiconductor and AI ecosystem trade keeps on rocking with Micron joining the trillion dollar club and market breadth a more distant memory.
The SaaS-based service players and software names are seeing some mount a slow, limited comeback, but the numbers remain grim YTD.

The above table updates timeline returns for our usual equity and debt benchmarks. We see all fixed income lines in the red for the 1-month period with only HY making it into positive range (barely) for 3 months. The duration impact is also evident in the YTD returns for UST and IG corporates with its longer duration.

Iran fallout has slowed equity progress even with techcentric benchmarks holding in well for the trailing 1-month period. The moves from here face an important series of pivotal points ahead for the Strait of Hormuz and how the cost pressures from the energy spike will flow into inflation directly (energy CPI/PCE) and indirectly through materials costs or surcharges in freight and logistics.

The above chart updates the UST deltas since the Iran bombing kicked into gear. It is an ugly move considering how 2026 began with debates around FOMC easing with “how many and how soon.” It is now a question of hikes.

As we go to print today, the FedWatch odds of easing by the FOMC Dec 2026 are now posting 0%. The odds of no change by Dec 2026 are now 49.5% while 1 hike stands at 38.7% and 2 hikes at 10.6%. These probabilities have been whipping around. One week ago, the probability of 1 hike was ahead of unchanged.

The above chart updated the 1-week UST deltas as a modest rise on the front end contrasted with a slight decline on the long end as oil pulled back. The potential for a bear steepener or upward shift may be more tied to a satisfactory outcome with Iran and the Strait, but the near-term inflation outlook is not an optimistic one after last month’s turn for the worse in inflation (see Producer Price Index April 2026: Heat Rising on Cost Inputs 5-13-26, CPI April 2026: 4.1% All Items Less Shelter, 30Y UST 5% 5-12-26).

As we covered in our weekly tech check posted on LinkedIn and reposted below, the tech bellwethers weighed in with a mixed week with a few of the bellwethers such as NVIDIA, Alphabet, and Broadcom having an off week as NVDA beat estimates but faded quickly in the market. The Semiconductor ETF (SOXX) still delivered a 5.67% week in the #1 spot despite NVDA sitting on the bottom.

The following is a cut and paste of our weekend LinkedIn post with some edits:

We update weekly returns for the 32 benchmarks and ETFs we follow. Political dysfunction so far is not derailing winning streaks or intermittent record highs for major benchmarks. Iran escalation risk, inflation worries, UST curve migration, and handicapping consumer fallout are the main events with a wide range of potential outcomes.

The score of 28-4 in the chart shows all bond ETFs positive. The long duration UST ETF (TLT) led the way despite bearish commentary.

Legislative turmoil is a risk and took a bad turn the past week as Trump handed himself immunity from the IRS at a time when his billions have multiplied since he became President. The Trump plan would generate “1,776” million ($1.8bn) to dispense checks to a range of “characters” that include those who beat police and sacked the capitol.

The House and Senate went fleeing from votes for the holiday weekend to avoid going on record. Hopefully they visited some Memorial Day monuments and rubbed them a few times to perhaps get a remote sense of courage – or consider what real sacrifice is for those with the mettle they lack.

The question of whether the US is becoming more like an emerging market of the 1970s is getting answered. This “1776” abomination is not good news. Some see it as a thug retainer for the midterms and a signal to state houses to take “legal risk” (i.e. break election laws).

If you believe policy=politics=economics=finance, then in theory lunacy in Washington should flow into policy anxiety, deficit fears, and potential for more erratic behavior in the geopolitical realm (NATO, Greenland, Cuba, anything Europe, USMCA review). The Iran strategy signals a divorce from the reality of secondary and tertiary effects as well as a lack of respect for unintended consequences. We have moved beyond the usual political hate mongering into hot wars and believable threats of annexation (Greenland, Cuba, Alberta next?). Legitimate fears of election interference by Trump are spiking.

A strong earnings season has been a source of support. Debates around consumers stabilizing has some hard number support pushing back on the “soft” consumer sentiment index that hit fresh record lows this past week. Walmart’s and BJ’s earnings brought some negative color that hammered their equities as proxies, but some retail earnings were “beats” and drove stock rallies such as Ross Stores and TJX. Retail equity performance is relatively good 2026 YTD and this past week as we will look at separately (see Retail Equity Comps: Looking for Signals 5-26-26).

The Trump game of picking daisy petals (“I will bomb them, I will bomb them not”) can wag $10 swings in oil each week, but the bridge to a deal between the parties is really hard to envision. Oil saw WTI drop down to a $96 handle to close Friday from $105 the prior Friday, but the UST curve only saw modest relief by the end of the week. As of Tuesday, WTI is just under $94 handle as we post this.

We covered the ugly UST deltas since Iran in our Substack commentaries (Macro4Micro.com) and LinkedIn posts. There is no hiding from more of the same UST pain and bearish inflation expectations until there is clarity on Iran and the Strait.

The following is a cut and paste of our weekend LinkedIn post with some edits:

We update the weekly returns on our “Tech Check” list in what has been a volatile market for the winners and losers. The price returns were mixed even if we see the usual pattern of Hi-Lo outliers with semiconductors crushing the market and some SaaS-based companies taking a beating. The score this week was 21-11 with 3 of the Mag 7 in the bottom quartile, 3 in the 3rd quartile, and 1 in the 2nd quartile.

Most of the major tech names beat the NASDAQ and S&P 500 this week with those benchmarks in the 3rd quartile. In contrast, the Russell 2000 small cap benchmark was in the upper half of the 2nd quartile. The top quartile was half semis with 3 SaaS-based names and 1 diversified tech (IBM). That was a more balanced mix than in recent weeks.

We see 4 names with double-digit returns on the week with Qualcomm (QCOMM), IBM, Advanced Micro (AMD), and Intel (INTC) in that group. IBM had been one of the names tagged as vulnerable to AI displacement and remains in the bottom quartile YTD even if at the top of the YTD bottom quartile with a -14.3% return. IBM’s boost this week was tied in part to the headlines around government support for quantum computing and supercomputers with talk around direct investments by the US. Market commentary included some jawboning of parallels to the Intel comeback that came after US government investment and support.

On the downside, the market saw Intuit (INTU) slaughtered with a -18.6% week. On a YTD basis, that puts INTU in last place in price return at -51.7% just behind Zillow (Z) at -46.7%. Zillow joined INTU in the bottom quartile again this week in the bottom 3 and were surprisingly joined by NVDA in second to last after an earnings report beat.

On a YTD basis, NVDA was positioned in the lower half of the second quartile with a wide range of semiconductor peers and AI-sensitive names. We look at the YTD and other asset return horizons separately.

We see some notable software and SaaS-based names clawing back up the ranks lately with FactSet (FDS), ServiceNow (NOW) and Salesforce (CRM) in the top quartile this week. All three of those are in negative range for YTD returns, so it has been a long road back. The Software ETF (IGV) was positive this week but still negative YTD.

The 1-month horizon reminds us that the equity market has been a case study in resilience with a score of 19-13 even with troubling inflation numbers and Iran turmoil leaving some critical variables subject to highly uncertain geopolitical deal outcomes. Escalation scenarios are ugly, but the peaceful end game is encumbered by radical religious extremism on one side and geopolitical incompetence and pathological delusion on the other. That makes for some challenging ground to cover in the context of global capital markets. Just sayin’.

The UST curve action has been unkind with all 7 of the bond ETFs in the red zone. Duration is mounting a comeback to start the shortened post-Memorial Day week on Tuesday, but the oil price swings could go either way and in dramatic fashion. The energy trade rags are conveying competing stories around how long the tail pain in oil prices will be for upstream and downstream energy if the situation lasts (in some scenarios even if it does not last).

Looking back at the winners through Friday, we see the Tech ETF (XLK) well out in front followed by the Equal Weight NASDAQ 100 (QQEW) and NASDAQ in 3 of the top 4 slots with energy (XLE, AMLP) comprising the other 2 of the top 5 slots.

The major tech heavy benchmarks are killing the breadth story but holding up headline price action and index “new highs.” The tech heavy S&P 500 and small cap Russell 2000 are in the top tier with the more defensive and dividend-focused Consumer Staples (XLP).

Besides the 7 bond ETFs in negative range, we see Homebuilding (XHB) on the bottom with builders reporting shaky earnings and guidance, BDCs (BIZD) under a dark cloud with more fraud headlines and second guessing on the downside for marks, and some pressure on Transports (XTN) and Cyclical Materials (XLB).

The 1-month Tech Check list is no surprise and in line with the recent price action we frame each week with Semiconductors the big winner. We see the entire top quartile comprised of tech even with no broad market tech-centric benchmarks in the top tier (NASDAQ and the S&P 500 are in the second quartile).

Intel (INTC), Qualcomm (QCOMM), Advanced Micro (AMD), Micron (MU) were well ahead of the pack through Friday with Cisco (CSCO), the Semi ETF (SOXX), the Tech ETF (XLK), and Apple (AAPL) rounding out the top tier. Micron ran wild again on Tuesday as we go to print and is up 19% on the day with NASDAQ and S&P 500 hitting all-time highs and MU joining the $1 trillion market cap club.

The bottom dwellers are still the SaaS-based services operators and software names. We see Intuit (INTU) at -21.7% in last place with Zillow in 2nd to last at -21.0%. Palantir (PLTR) at -10.3% and Meta at -9.6% are also in a hole with Microsoft (MSFT) in the bottom quartile and in the red. The software ETF (IGV) has managed to claw its way back into the middle of the second quartile over the month.

The 3-month timeline is essentially an Iran time horizon. The positive vs. negative score is a tossup at 16-16. We see some obvious trends such as the E&P ETF (XOP) and Diversified Energy ETF (XLE) charging ahead and the Tech ETF (XLK) well ahead at #1 with the NASDAQ and Equal Weight NASDAQ 100 (QQEW) rounding out the top 5.

The surge in Base Metals (DBB) is also directly tied to the Strait shutdown as aluminum supply-demand imbalances sent aluminum soaring directly on supply while the Strait has also undermined the supply of sulfur/sulfuric acid for global copper production.

For bond ETFs, we see 6 of 7 negative with the long duration UST ETF (TLT) generating the worst returns of the pack. The shorter duration US HY ETF (HYG) managed to land in a very slight positive range on coupon income and spreads. Spreads tightened by around 24 bps from 2-26-26 through recent days (5-25-26 at +274 bps). Those spreads are compressed by any standard.

The above chart frames the YTD for the diversified group of 32 and we see the positive bias at a score of 23-9. Bond ETFs comprise 4 of the 9 asset lines in the red. The others in negative range include BDCs (BIZD) in last place with Financials (XLF) 2^nd to last below Health Care (XLV), Homebuilders (XHB) and Communications Services (XLC).

Energy has grabbed 3 of the top 4 slots with only Tech (XLK) splitting up the streak at #3. E&P (XOP) is #1, Diversified Energy (XLE) is #2, and Midstream (AMLP) is #4. The overall top tier mix might surprise with Transports (XTN) at #5 and Russell 2000 small caps at #6. NASDAQ in the top tier at #7 is logical as is Base Metals (DBB) with all of the Gulf disruptions.

The above chart details the YTD returns on the Tech Check list. We see a score of 18-14 with the semiconductor and an array of names tied to the AI infrastructure and data center expansion themes. The capex boom and “all the trimmings” that go with those fixed asset investments have fortified many investors to look past the Iran, oil, and yield curve chaos – for now. There is still a lot of revenue model evidence in the AI themes that will need to get tested.

The word “tech” is clearly not magic as the bottom quartile demonstrates with the returns on many software and SaaS-based service names deeply in the red. The bottom quartile bracket runs from -14.3% for IBM to -51.7% with Intuit (INTU). We have been covering those issues in the weekly Tech Check commentaries on LinkedIn and in earlier asset return comments.

The running LTM asset returns are a reminder of a great run in equity markets for many industry groups and broad benchmarks. We see only the BDCs (BIZD) in the red. We see 5 of the 8 in the bottom quartile comprised of bond ETFs. They join the BDCs (BIZD), who sit in last place, with Financials (XLF) and Homebuilders (XHB) in the bottom tier.

It took a very impressive 29.5% to make the top quartile but that jumped to 40.0% to be #7. Those results in the top tier are healthy multiples of the long-term return on the equity asset class. The LTM median return on the list is around +16.6%.

Housing Starts April 2026: Soft Starts in Single Family 5-22-26

D.R. Horton: Financial Powerhouse Despite Cyclical Softening 5-20-26

Market Commentary: Asset Returns 5-18-26

Taiwan: Stakes are High, US Awareness is Low 5-17-26

Industrial Production April 2026: Bringing a Lift 5-15-26

Existing Home Sales April 2026: Steady or Clinging? 5-14-26

Producer Price Index April 2026: Heat Rising on Cost Inputs 5-13-26

CPI April 2026: 4.1% All Items Less Shelter, 30Y UST 5% 5-12-26

JOLTS March 2026: Openings Down, Hires Up, Layoffs/Discharges Up 5-5-26

New Home Sales March 2026: Favorable Volume, Weaker Prices 5-5-26

PCE Inflation, Income & Outlays March 2026: Inflation Anxiety Level? 5-3-26

1Q26 GDP Advance Estimate: Consumer Fade, Investment Boom 4-30-26

Synchrony Financial: Favorable Consumer Credit Signals 4-24-26

Existing Home Sales March 2026: New Beginnings or New Ends? 4-15-26

4Q25 GDP: More Adverse Revisions in the Golden Year 4-9-26

The US as an Aspiring Emerging Market: Fiscal SNAFU, Political FUBAR 4-6-26

Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

Memorial Day: Remembering the Fallen

Glenn Reynolds, CFA — Mon, 25 May 2026 21:20:46 GMT

Aisne-Marne American Cemetery

Market Commentary: Asset Returns 5-18-26

Glenn Reynolds, CFA — Mon, 18 May 2026 18:10:12 GMT

The clock is ticking…

Time has a value that is hard to measure with the current set of risks, but the Iran War keeps costing more the longer it lasts across the markets, consumers, and many industries in the US. We see even worse pain in Europe and Asia with Africa also facing threats from the fertilizer crisis.
The only real way to meet the list of US demands on Iran is to put troops on the ground. That is not a solution Trump appears willing to take. The only way to meet the Iranian demands of the US is…not possible.
The week overall was a brutal one for the UST curve as ugly PPI and CPI metrics raise worries about what comes next. The avoidance-of-disaster policy seems to be “let the Strait of Hormuz sit as it is.” The UST curve is starting off this week in mild fashion with a slight decline as we go to print.
The lack of a realistic solution in Iran is caught up in the clash of Homeric egos on the US side (Trump, Hegseth) and the religious fanaticism on the Iranian side. That makes it hard to solve for X.
This week brings NVIDIA earnings and we will also see the start of the retailer earnings season, which in turn should provide some useful consumer color (Walmart, TJX, Home Depot, Lowe’s, BJ’s, Ross Stores, etc.).

The above chart updates the high-level index benchmarks we track for debt and equities. The bond returns are getting damaged by inflation and the UST action. Equities slowed down this past week as we cover below, but it is hard to put a meaningful dent in growth stocks and tech overall even if some sectors are taking a beating along the way (notably software).

The YTD return metrics remain very strong for broad market benchmarks with NASDAQ, Russell 2000, and Growth indexes still impressive for the trailing 1-year as well. Those 1-year returns are a multiple of the long-term returns on the equity asset class. Meanwhile, the rolling 3-month and YTD returns for the large caps are solid for the S&P 500 and very impressive for NASDAQ and Growth.

The small caps have been a favorable performance story in this cycle, but those will face headwinds if the oil fiasco is sustained and keeps pressure on small business costs (energy, tariffs) and any consumer weakness that might surface in discretionary spending with the nondiscretionary expenses rising.

The text below is partly a cut-and-paste of a LinkedIn post from the weekend with some edits:

This chart speaks for itself after a rough stretch for the UST since Trump launched the Iran War. We wrap a bad week and a very bad Friday for the yield curve and duration. We measure the UST deltas from a start date of 2/26 just ahead of the 2/28 Iran bombing

The +67 bps on the 2Y, +69 bps on the 5Y, and the +57 bps on the 10Y make a statement. Friday saw double-digit moves in the 5Y, 10Y, and 30Y with the 5Y taking a bigger hit at almost +15 bps. The 30Y UST at +45 bps in the chart drove a move to 5.12% at Friday close (5.13% today). The Mortgage News Daily 30Y survey hit 6.65% on Friday to move toward 8-month highs.

The 2Y UST moved almost +9 bps higher Friday, and that signals how the market is seeing the odds of Fed easing. As of Monday midday, the FedWatch “Vegas line” shows odds of 0% for a single cut by the Dec 2026 FOMC meeting, 50.9% odds of unchanged, a 38.2% chance of 1 hike and almost 9.8% chance of 2 hikes. The odds of 3 hikes are at 1.1% but still higher than 1 cut.

These odds will be jumping around in coming days, and Warsh will be walking into an interesting backdrop. His “trimmed mean” data plan might need an Etch A Sketch to shake. As we detail below, we see all negative bond ETF returns for the week with 1-month returns for the 7 bond ETFs also all negative and the long duration UST ETF (TLT) in the bottom quartile.

The above chart frames the UST delta for last week for a view on how much of this past week’s blowup flowed into the post-Iran UST curve deltas. The +22 bps on the 5Y UST vs. the +59 bps post-Iran offers a stark reminder that more oil price pressure and less hope of inflation getting under wraps could move the curve meaningfully from here.

The above chart offers one more angle on how the UST was behaving ahead of the post-Iran spike with the 5Y at +53 bps YTD vs. the +69 bps since just before the start of the US-Israel military action against Iran. The 10Y was +57 bps since Iran vs. +41 bps above and the 30Y UST was +45 bps vs. +28 bps above, so the damage to the UST curve has been about Iran.

The Magnificent 7 heavy ETFs…

The “Mag 7+3” can be considered a key part of the tech drivers when Broadcom (AVGO), Oracle (ORCL) and Taiwan Semiconductor (TSM) are added to the mix. Those market cap rankings have been moving around across the months, and the growth in names such as Micron ($817 bn market cap) may require some new grouping and tag lines as 2026 proceeds. Oracle is more a software and systems company that has been volatile and has fallen off the pace (ORCL is a holding in the Software ETF, IGV). Taiwan Semi has been consistent, and Broadcom also is comfortably in “the trillion plus club” at this point.

We look at a mix of tech bellwethers and benchmarks above and a broader array of tech benchmarks, ETFs, and single names further below.

This week shows 4 of 7 Mag 7 names in positive range ahead of the S&P 500 with 3 in the red and below the broader market. Amazon sits in last place on the week after being a strong relative performer over the past 3 months and no running timelines in the negative range in the chart except the current week.

Tesla continues to struggle on and off with a negative week and negative YTD performance. Alphabet had an off week in contrast to a very strong run across other timelines.

Oracle remains one of the more erratic names of the Mag 7+3 and is negative YTD. Taiwan Semi was in the red for the week after a very steady and stable run and the same for Broadcom.

The Semiconductor ETF (SOXX) had a bad week, but that was only after a dazzling run of just under 69% YTD. NVIDIA reports this week and led the list this week.

The comments below are essentially a cut and paste from a LinkedIn note we posted over the weekend with some additional edits:

The chart above updates the weekly returns for the 32 market benchmarks and ETFs we monitor. This week posted a very different profile of returns at 8 positive and 24 negative. The top quartile only required minimal positive returns to qualify for the top tier. We see the top 3 of the high quartile from the energy sector with the Energy ETF (XLE), E&P (XOP), and Midstream (AMLP).

Only the S&P 500 among broad benchmarks registered in positive range despite only 4 of 11 broad S&P sectors positive (including Energy at +6.8%). As noted in the chart, the Tech ETF (XLK) was barely positive and just ahead of the S&P 500 at less than 1%. NASDAQ was slightly negative with Russell 2000 small caps near the bottom of the 3rd quartile with Midcaps in negative range.

The bond ETFs were all in the red, and we see interest rate sensitive sectors hit hard with Homebuilders (XHB) in last place joined in the bottom quartile by Regional Banks (KRE), Real Estate (XLRE), and the long duration UST ETF (TLT).

In an eventful week for geopolitical speculation (e.g. the fate of Taiwan as the US “passport to AI paradise”) and the official end of the Powell role as Fed Chair, the reality of inflation (CPI, PPI) and material upward pressure on the UST curve and mortgage rates led the risk factor parade. The interest expense bill for the growing deficit just keeps rising and FOMC odds now favor hikes over cuts.

The adverse yield curve shift was running alongside higher oil prices, and the continuation of the painful impasse in the Strait of Hormuz is still very much a fact of economic life. WTI closed Friday at over $105, up from a $95 handle to end the prior Friday. The game clock without end is intrinsically bad, and the statements by Trump did not help ease tension on the availability of any offramps.

The China trip and accompanying commentary offered little comfort of any breakthroughs in the Iran game plans with some side comments implying continued inaction and willingness to just let it ride in status quo for a while. The recurring threats of more bombing loses credibility as a solution in the markets given the potential for Iran to retaliate with the Houthis in the wings. Such sentiments can shift with the calendar (or a stopwatch).

Time is not on the side of Iran, and near-term imbalances worsening.

The comments below are essentially a cut and paste from a LinkedIn note we posted on the weekend with some additional edits:

The chart details the weekly returns for the mix of 32 tech single names, ETFs, and broad benchmarks we monitor. The score of 10-22 shows a much more diverse mix in the bottom quartile than we have been seeing in recent weeks when software and SaaS-based services operations dominated the low quartile.

This week has Intel (INTC) in last place joined by Qualcomm (QCOM) and Advanced Micro (AMD) in 3 of the bottom 4 slots with Zillow (SaaS subsector) continuing to suffer. We see Micron (MU) in the red just across the line at the bottom of the 3rd quartile.

Cisco (CSCO) reported earnings this week and offered one of many reminders of the scale of the AI economic ecosystem and the capex multiplier effects across so many products and services subsectors. CSCO dramatically revised their expected order book higher for 2026 from $5 bn to $9 bn, which in turn sent analysts scrambling to revise forecasts and ponder ratings. AI end markets stimulate demand for networking equipment with CSCO as a winner.

An important asterisk to the CSCO headlines on booming earnings was the announcement this week of a restructuring that will include 4,000 jobs (<5% of the workforce) to prioritize growth areas. That offers the latest reminder that the “AI revolution” will come with a lot of headcount action to redeploy resources or offset capex needs.

Looking across the winners and losers of the week, we still see 4 of the recurring victims of “AI anxiety” in the low end of the weekly returns with Zillow (Z), FactSet (FDS), Salesforce (CRM) and IBM in the bottom quartile. On the short list of material variances this week was the Software ETF (IGV) bumping up into the lower end of the top quartile - but with only a +0.69% return.

The top tier shows a sharp drop after the +22.4% posted by #1 CSCO with NVDA a distant #2 at +4.7%. We see NASDAQ and S&P 500 in the upper end of the second quartile with the Communications Service ETF (XLC) just behind the S&P 500 and NASDAQ. The Semiconductor ETF (SOXX) faded into the 3rd quartile this week.

The Mag 7 sees 4 of the 7 in the top quartile (NVDA, AAPL, MSFT, META). 2 of the Mag 7 are in the 2nd quartile (GOOGL, TSLA) with Broadcom (AVGO) while AMZN is in the bottom quartile. Oracle (ORCL) and Taiwan Semi (TSM) were in the 3rd quartile rounding out the mix of the “Mag 7+3.”

The 1month score weighed in at 14-18 with all bond ETFs in the red and the long duration UST ETF (TLT) in the bottom 5. Interest rate sensitivity was punished with Homebuilders (XHB) in last place joined in the bottom tier by Regional Banks (KRE), Financials (XLF), and Utilities (XLU).

BDCs (BIZD) remain a mixed picture with asset quality under a cloud and the chances for higher yields on floating rate assets not enough income to offset investor sentiment.

The winners on the month are framed in tech concentration while the energy names keep benefiting from Iran with Midstream (AMLP), Broad Energy (XLE) and E&P (XOP) in the top quartile. XLK was way ahead of the pack at #1 as NVDA gets ready for earnings this coming week. We see NASDAQ at #2 with the Equal Weight NASDAQ 100 ETF (QQEW) at #4. The dividend heavy Consumer Staples (XLP) made the bottom of the top tier despite the UST move.

The tech-heavy S&P 500 made the top tier with Russell 2000 and Midcaps dropping into the upper half of the 2^nd tier.

The 1-month tech check has posted some dazzling numbers as we have covered along the way. The score of 25-7 positive vs. negative does not capture the flavor of the booming performance in the top quartile where it took a 43% return to make the top 5 and took a 17% handle for 1 month to make the top tier.

Intel (INTC) posted the banner month of the group at +67.5% followed closely by Advanced Micro (AMD), Micron (MU), and Qualcomm (QCOMM) for a Murderer’s Row of semi names then followed by legacy networking leader Cisco (CSCO) which soared over 22% off this past week’s earnings as noted in the 1-week chart. The Semiconductor ETF (SOXX) posted +26.5% with the top quartile rounded out by Alphabet (GOOGL) and the Tech ETF (XLK).

The Software ETF (IGV) was mounting a comeback with a +10.6% month even though the YTD return for IGV is still running in the red at -13.2%. We see 6 of the 8 in the bottom quartile comprised of Software or SaaS-based service names again although META has struggled badly this month in the low tier and also dragged down the Communications Services ETF (XLC) in the process.

The rolling 3 months includes a heavy dose of Iran effects with a start date for the measurement period almost 2 weeks before Iran. The 14-18 score included a heavy influence of tech and energy in the top quartile. Tech (XLK) was on top with NASDAQ #3 and the Equal Weight NASDAQ 100 (QQEW) at #5. The E&P ETF (XOP) took #2 and was joined by the Energy ETF (XLE) at #4 and Midstream (AMLP) at #8. Base Metals (DBB) made the top quartile on Gulf supply disruptions.

Some good news is that the 4 broad market benchmarks include 2 in the top quartile (NASDAQ and the tech-heavy S&P 500) with small and midcaps in the upper end of the 2^nd quartile (Russell 2000, Midcap S&P 400).

The low quartile saw interest rate sensitivity and cyclicality punished with Homebuilders (XHB) dead last by a material discount at -20.4%, which was not helped by a poor earnings season and guidance from builders combined with mortgage rates climbing north of 6.6% to end this week.

The broader mix of 32 benchmarks and ETFs show YTD returns posting a 22-10 score with 4 of 7 bond ETFs negative and the remaining 3 barely positive. Interest rate sensitivity has been a negative YTD outside bonds as well. We see Financials (XLF) second to last and Homebuilders (XHB) 3 off the bottom. The last place finish was grabbed by BDCs at -7.5%, which was at least somewhat better than the LTM return of -10.7%.

Energy ETFs took the top 2 slots and #4 position with E&P (XOP), Energy (XLE), and Midstream (AMLP). Tech ETF (XLK) took #3 and NASDAQ #5 to round out the top 5. Notable benchmark performances were seen from the Rusell 2000, which made the top quartile and beat the S&P 500. Midcaps also edged out the S&P 500 in the 2^nd quartile.

With a score of 18-14, the “Tech Check” mix YTD underscored the strength of semiconductors and other AI infrastructure plays (CSCO) while seeing software and SaaS-based services operators take a beating in negative range. The entire bottom quartile is software, SaaS services, or any company seen as threatened by AI. Even the multi-business IBM could not escape.

The top 5 are in the semiconductor food chain from INTC down to SOXX including capex sensitive names such as Applied Materials (AMAT) at #4. It took a 26.8% return to make the top quartile. In stark contrast, the bottom quartile starts at -24.6% for Palantir and ends with Zillow (Z) in last place at -44.8%.

The positive vs. negative score has seen minimal movement on an LTM basis with the bottom dwellers at this point seeing Homebuilders (XHB) at -2.2%, making it a 30-2 count and joining the BDCs (BIZD) in last place with its -10.7% performance.

The rolling return visual

In the final section below, we combine the details of the 32 ETFs and benchmarks for a mix of trailing periods. The condensed 4-chart view offers an easy visual on how the mix of positive vs. negative returns shape up. We see it as a useful exercise in looking for signals across industry groups and asset classes.

The post-Iran period has brought in more negative returns into the mix across the recent periods than we had been seeing.

Industrial Production April 2026: Bringing a Lift 5-15-26

Existing Home Sales April 2026: Steady or Clinging? 5-14-26

Producer Price Index April 2026: Heat Rising on Cost Inputs 5-13-26

CPI April 2026: 4.1% All Items Less Shelter, 30Y UST 5% 5-12-26

JOLTS March 2026: Openings Down, Hires Up, Layoffs/Discharges Up 5-5-26

New Home Sales March 2026: Favorable Volume, Weaker Prices 5-5-26

PCE Inflation, Income & Outlays March 2026: Inflation Anxiety Level? 5-3-26

1Q26 GDP Advance Estimate: Consumer Fade, Investment Boom 4-30-26

Synchrony Financial: Favorable Consumer Credit Signals 4-24-26

Industrial Production March 2026: Mixed Picture, Big Questions Ahead 4-16-26

Existing Home Sales March 2026: New Beginnings or New Ends? 4-15-26

4Q25 GDP: More Adverse Revisions in the Golden Year 4-9-26

The US as an Aspiring Emerging Market: Fiscal SNAFU, Political FUBAR 4-6-26

Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

Taiwan: Stakes are High, US Awareness is Low

Glenn Reynolds, CFA — Sun, 17 May 2026 22:02:26 GMT

Time for the White House to brush up on history?

The AI multiplier effects show up across the US macro landscape from the stock markets to record capex and fixed investment in the GDP accounts. As a result, Taiwan has been touted as the key to sustaining the macro, market and tech momentum for clearly evident reasons (see Wall Street OpEd this past week Taiwan Is the Key to AI Dominance 5-13-26).
“China week” and Trump’s trip did not go well for markets and notably the UST curve. WTI spiked by $10, and some energy trade rags were pointing at the China trip as a major contributor. Trump being off in China took some focus off Iran, but the clock keeps ticking on the oil supply crisis with this brutal stalemate. You can’t fight the supply factor and the clock. Time is not on anyone’s side at this point.
The already massive trade deficit with Taiwan is soaring in 2026 along with imports, so there is a remote probability that Trump might even learn that trade deficits can be good at times. Through March, Taiwan moved ahead of the EU and Mexico on the top trade deficit rankings after being #5 for 2025 (see US-Taiwan Trade: Risks Behind the Curtain 2-1-26, Trade Deficits: Math Challenge1-30-26). Through 1Q26, the trade deficit with Taiwan is up to -$52.9 bn vs. -$22.4 bn in 1Q25.
Taiwan has blown past China also in 1Q26 in the trade deficit rankings, so the combined Taiwan + China trade deficit will be other worldly. The demand is real for what Taiwan supplies, so that is in fact good news for the US economy and stock market (someone inform Trump please).
On the short list of things that will “never happen” is Trump reading up on the history of Chiang, Mao, the Chinese revolution, the exodus to Taiwan, and how the various Presidents have operated in this area. The less said by Trump the better given the massive stock market stakes, macro risks, and, under some scenarios, the very real risk of war with China. The paths to such setbacks are easily identifiable – sort of like Iran closing the Strait of Hormuz. It is hard to take anything for granted these days.

We break out a mix of trade deficit statistics above for 1Q26 with Taiwan now taking the lead. Taiwan’s deficit is now ahead of major trade partners such as the EU and Mexico. Vietnam is ahead of those also, but we are locking in on the Taiwan story and how its near doubling of imports YTD has a story to tell about the increasingly critical relationship between Taiwan imports and the strength of the securities markets and fixed investment component of GDP (see 1Q26 GDP Advance Estimate: Consumer Fade, Investment Boom 4-30-26).

The need to recognize the importance of Taiwan as a trade partner and tenuous geopolitical challenge should go without saying, but the White House has not been conceptually or factually sound in how it looks at trade deficits. We will not beat that dead horse again here (see Trade Deficits: Math Challenge 1-30-26, Tariffs: Questions to Ponder, Part 1 2-2-25, The Trade Picture: Facts to Respect, Topics to Ponder 2-5-25). It would be reassuring to believe Trump might learn from this example.

We also highlight the low deficit of Canada in the chart as the USMCA review process is on the immediate horizon. That Canada-US goods deficit is a solid surplus if we back out oil imports from Canada.

The Taiwan challenge…

The best news from the trip to China is that Trump did not and would not speak on the subject of Taiwan in any detail (e.g. weapons sales). That was a victory. Given his versions of WWI and WWII, the chances that Trump knows a shred of anything about China-Taiwan-US history is low. That makes for very unfavorable diplomatic risk symmetry as we have seen regularly from the White House. Trump’s lovefest with dictators is not new, but many of the MAGA types in Congress have been rewired to hate China by Trump himself.

The odds of Trump knowing about the One China policy, the history with Nixon, the UN, Carter, or Reagan are in the “when pigs fly” probability range. We saw that in Trump 1.0, but these days Taiwan is the cornerstone of AI and its massive capex multiplier effects across the economy. The stakes are high, and the cost of saying the wrong thing with incorrect historical facts (as Trump has done once or twice) could be very high.

US, China, Taiwan and a very jaded history…

The issue of Taiwan has been a very hot topic since long before 1949 when Mao and his army won the Chinese civil war and drove Chiang Kai-shek off the mainland to Taiwan. The challenges of China fighting the Japanese and the behavior of Team Chiang vs. Team Mao was later tackled by historians in ways they we did not learn about in school during the Vietnam years. Revisionist history and declassification dug into the brutal details as never before.

Like most such histories, the emotions run high and bias is often crystallized. The darker side of truth gets people’s blood up when conventional historical themes get questioned. These are different times, however, with the President of the US backing Russia with minimal effort to course correct. As in the US, where the Civil War gets too wide a range of versions (especially from the current White House), self-serving interpretations are the norm.

China Lobby and “who lost China?”

Henry Luce (Time Magazine) and the rise of the “China Lobby” in the US brought much to absorb and act upon by both rational, ethical people in Washington (e.g. Truman) and irrational ethics-free scumbags (Senator Joe McCarthy). The Chinese revolution was an event for the ages that still resonates today. Even as former enemies (Germany, Japan) were quickly “forgiven” and became critical Cold War allies and trade partners, China policies were a constant struggle. Truman had to wade into Korea while later JFK and LBJ faced the Vietnam decision challenges that came with the rise of Communism.

The fact that the Korean War occurred shortly after the 1949 Mao victory in the civil war set the tone and began the great challenge (and misread) of how to counter the Asia revolutions. In the case of Korea, the shockingly incorrect views of MacArthur on what China would and could do in Korea has been an evolving part of American history.

The “China and Mao” are evil themes have been getting promoted in recent years by Trump and the GOP although that is not new. Disclosure: my father enlisted in the Marines out of high school to fight in Korea and still had the “high and tight” hair when I was high school reading history on Korea and Vietnam. I would not repeat the “new history” over dinner as Saigon fell in 1975.

A lack of historical perspective still pervades the history of Chiang in Taiwan (Google or ChatGPT “228 Massacre” of 1947 for some flavor). The government of Chiang and his party include almost 4 decades of martial law and political execution of local Taiwanese. In recent years, I made an acquaintance of a Taiwanese minister who opened that door of history for me. His grandfather was a political murder victim. It is always more complicated than the classroom cliff notes. Taiwan history tends to be a neglected topic.

Nixon to Carter evolution on China…

The later years of Nixon and Carter redefined the nature of America’s recognition of China and the “One China” policy. During the years of the China Lobby, the question of “Who lost China?” was a political blame game (only later was the question countered with, “Who said China was ours to lose?”). That was the start of using journalism and media to promote partisan history and reverse engineering of facts. We are back there now under Trump.

The biggest changes came in the 1970s under Nixon in 1971 with the UN and later with Carter. The short version is China became the UN member on the Security Council. The Chiang Nationalists were out. It got better from there for China. Opening up relations with the PRC took an ancestral redbaiter such as Nixon since he could not be labeled as a “commie pinko” during those days when Vietnam was slowly winding down as a fiasco.

Until 1971, the US did not recognize one of the most populated nations on earth - China (the PRC) – who fought a war against the US in Korea. That seemed to make them a nation to most European observers. The policy before Nixon was that China was not recognized and that in fact did not exist. China joined the nuclear bomb club in 1964, and that was going to assure recognition at some point.

Nixon initially supported dual representation at the UN, but the UN voted to make the PRC the sole China under the United Nations. The US had its hand basically forced by 1972:

The U.S. side declared: The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States Government does not challenge that position. It reaffirms its interest in a peaceful settlement of the Taiwan question by the Chinese themselves.

The “rapprochement” really started the ball rolling, and the withdrawal of formal recognition came in 1979 (note: Chiang died in 1975) when the US withdrew recognition of the Republic of China (Taiwan). The fact that Jimmy Carter made it all official in 1979 was in many ways already established in substance under Nixon and certainly at the UN.

The US recognizes One China unequivocally then and now. Reagan policy did not change the core policy, but the whole timeline is one of ambiguities in many areas (defense supply, etc.) except for one – there is one China.

History is an out-of-favor discipline in the current “whatever Trump says” backdrop

History courses are wrapped around the history of China and Taiwan, and legions of authors have published books and papers on the topic. Foreign policy wonks pour out literature. For a more current Taiwan focus, we recommend the book “Accidental State: The United States and the Making of Taiwan” authored by Hsiao-ting Lin.

For some reading material in the China lobby history and the ugly Cold War times, a good source that frames a rapidly changing approach to political journalism and debates over what makes for “historical facts” is the book, “The Publisher: Henry Luce and His American Century” by Alan Brinkley.

Another good one that tells a story of the decades leading up to WWII and clashes between US leaders and Chiang is, “Stillwell and the American Experience in China” by Barbara Tuchman. The criticism of Chiang’s policies before and during the war with Japan is not hard to find. Many say his priority was watching Mao more than the Japanese.

The main message is that such history is complex, the messages and opinions often conflict, and the decisionmakers play with the story lines to satisfy their own goals. Taiwan will be another one of these examples in 2026-2027. The main “fact” is that there is One China. So as the US goes on a Manifest Destiny bender with James Polk a hero to Trump hanging on his wall, that would appear to put the US in the spectator seats on Taiwan – even if it can be a noisy spectator. Trump talks of the “Donroe Doctrine” and annexations. That can set a bar – except the policy of One China is already set.

Asia a case study in mixed history…

The banning of expertise in the foreign policy circles of Washington these days could turn into another case of “working with less facts and less history” and reverse engineering policy from the top down and filling in the data and facts later. Or ignoring them entirely.

“Policy by tantrum” will not work. Even a casual reader of history hammers home that tantrums and threats don’t work on China. The Marines of the “Frozen Chosin” lore found out the hard way that MacArthur’s assumptions were very wrong (like Hegseth’s on Iran). He made a lot of threats, and some were quite extreme. So, Truman fired him.

The main point is some of the biggest mistakes in 20^th century geopolitical history included fatal (literally for many) misreads of China and its moving parts. Those mistakes led to wars, domestic turmoil, and a complete misunderstanding of where to draw the line – and whether to draw the line. The Filipino-American War, Korea, and Vietnam included a lot of cultural ignorance, dubious facts and evidence, and limited appreciation for nationalism.

Taiwan is the most important US trade partner on earth right now…

The relevance now is that Taiwan also holds the key to the US technology revolution. As noted above, the trade deficit is going off the charts – in a good way – and is likely to accelerate. Taiwan is not for the US “to lose” any more than China was for Truman to lose. Those are stories for other days.

Picking on Cuba and Venezuela while threatening Greenland is very different than China and its long-established embrace by the US of the One China policy. Similarly, bombing Iran is much different than a land invasion.

Trump is getting schooled right now in seeing the scenarios. Fortunately, Trump has an inexperienced Fox News host and religious zealot to help him through it. The macro risks of that Iran “excursion” are already evident. Now imagine a blockade of Taiwan and a full-blown China trade war that lasts for many months.

Iran has been a bad enough misread on the risks. A China clash would be crippling economically. Even if you win, the Taiwan economy would not be rescued by the US and the tech chain would be broken. Lose-Lose.

Taiwan by itself is deeply divided on some of the issues to be addressed ahead. See Brookings: How do Taiwanese feel about the Cheng-Xi meeting? 5-8-26 and Chinese citizens’ affection for Taiwanese may reduce risk of cross-Strait conflict 12-18-25.

There is zero chance of everyone being satisfied with a Taiwan policy that meets the One China rule.

Market Commentary: Asset Returns 5-10-26

Glenn Reynolds, CFA — Sun, 10 May 2026 19:11:33 GMT

The Trouble with Sycophants: they just keep multiplying.

The moves in tech equities – and semiconductors narrowly – launched running returns for some major industry movers not seen since 1999 with tech-centric benchmarks posting trailing 1-year returns 3-4x the long-term annual returns on the equity asset class (even if well short of the crazy +86% for NASDAQ in 1999).
The 1-week return for the SOXX ETF of 11.7% reflected outsized moves by Micron (+37.7%), Advanced Micro (+26.2%), Intel (25.4%) and Qualcomm (+23.8%) as such market action fed a 1-month return for the NASDAQ of 16% with the Tech ETF (XLK) at 23.9%.
The FOMC and oil price wildcard remains unpredictable with CPI and PPI this week being critical drivers of sentiment as we push further into month 3 of the Iran War and all the disconnects in the futures and physical markets for oil and minimal chance of Iran caving in to a wide range of demands. Trump is seeking an exit that does not have him take the fall for “losing a war.” One plan is to say, “the war is over” and another is to say that “it is not a war.”
On the good news list has been an exceptional 1Q26 earnings season with FactSet reporting a blended S&P 500 earnings growth rate of over 27% (highest since 4Q21) with 89% of the S&P 500 companies having reported.

The above table updates our broad asset class benchmarks across debt and equity, and the reversal from the March sell-off has been stunningly strong in equities. Debt has been mixed over 1 month and 3 months with duration setbacks, but even that has been very mild with credit generally unflappable outside the recurring private credit headlines. Even private credit has calmed down a bit as BDCs reported and demystified what was going on under the hood. As we detail below, the BDC ETF (BIZD) posted positive 1-month returns and made it into the upper half of the second quartile. BIZD is almost back to 0% in returns for the rolling 3 months.

The equity benchmarks have also entered another zone this month led by tech as we cover in various charts below. Earnings season has been reassuring for the tech excess, which in turn just keep on getting more excessive. As we break out in the next chart, semiconductors are on a ride not seen in a tech bucket since 1999 – year when the NASDAQ printed over +86% for the year. The 16% 1-month return on NASDAQ and +11.9% return on Russell 3000 growth are impressive.

The 1999 TMT bubble experience of course ended badly, but the credit risk profiles of the main drivers this time around are quite healthy in contrast. Valuation methodologies, growth multiples, achievable revenue models, returns on the capex, related multiplier effects, and structural changes in tech and related services and goods markets are fair game to debate, but the bull market steamroller tends to run over second guessing at this point.

We posted the above chart on Thursday on our LinkedIn page but update the numbers for a stellar Friday that include daily moves such as Micron (+15.49%), Intel (13.96%), and Advanced Micro (+11.44%) with Qualcomm “lagging” at +8.1%. That was a “great month” in a single day.

As we discussed in our LinkedIn post (the following is a cut-and-paste with some edits and adds):

The chart details the run rate in total returns for the Semiconductor Index (SOXX) set against the S&P 500 ETF (SPY) and the Equal Weight S&P 500 ETF (RSP). For good measure, we include the E&P ETF (XOP) as a group rewarded by the spike in oil. The timeline covers the period from late Feb (2-26-26) and $67 area WTI before the Iran War kicked into gear through Thursday close ($95 handle WTI futures).

Anyone outside of an isolation ward knows that tech broadly and semiconductors narrowly have been key drivers of benchmark returns in the rebound during the post-Iran period. The visual captures some of it. AI capex, data centers, and the boom in tech products and semi demand are charging ahead with an acceleration of volumes as the base case and not retrenchment. Solid 1Q26 earnings and AI capex guidance have added to the tailwinds in tech.

The 45.8% return by SOXX is a long way from the +10.3% on XOP, the -0.3% return on RSP, and the +7.0% on the S&P 500 as of Friday’s close. That timeline rounds up to around 10 weeks. The chart offers a good visual on how SOXX soared after an ugly March while RSP stalled and the S&P 500 was muted but favorable.

The E&P sector will stay volatile wrapped around the “I am at war, I am not at war” information/disinformation exercises by the White house. A blockade is an act of war under international law. Referring to smaller exchanges of fire as “trifles” and “love taps” in a “ceasefire” is an obvious strategy to avoid War Powers Act challenges.

There has been more than a little commentary on the return to a lack of breadth driving headline equity returns. A subset of the equity market has dominated the move higher in the NASDAQ and for the S&P 500 with the heavy weightings in tech. That is great news for headlines and “record highs” in the large cap indexes and especially for those who are long the winning tech names. It helps if they light (or short) the losing side of tech subsectors getting beaten down such as software and SaaS-based service companies.

A big question will be what that concentration means for relative risk in the markets. Disappointment could be painful on the downside if the AI and chip trade falters and Iran fallout flows into cyclical expectations. The “cyclical vs. secular” debate is not a new one, but this is the most intense version since the late 1990s. A sustained move higher in oil prices would flow in FOMC odds and valuation parameters.

The rolling return visual

In the next section, we get into the details of the 32 ETFs and benchmarks for a mix of trailing periods. Below we offer a condensed 4-chart view for an easy visual on how the mix of positive vs. negative returns shape up. We see it as a useful exercise in looking for signals across industry groups and asset classes.

The symmetry of returns remains very much on the positive side as highlighted in the visual pattern above, but the exceptionally strong performance of tech and relative weighting has tended to push the broader market benchmarks (notably NASDAQ and S&P 500) into the top quartile across recent timelines. Even the performance of Russell 2000 has been influenced as small caps have been consistent top quartile performers in recent periods despite financials and industrials being a bigger factor for the Russell 2000.

The Magnificent 7 heavy ETFs…

The “Mag 7+3” can be considered a key part of the tech drivers when Broadcom (AVGO), Oracle (ORCL) and Taiwan Semiconductor (TSM) are added to the mix. Those market cap rankings have been moving around across the months, and the growth in names such as Micron ($842 bn market cap this week) may require some new grouping and tag lines as 2026 proceeds. Oracle is more a software and systems company (ORCL is a holding in the Software ETF, IGV), has been volatile and fallen off the pace. Taiwan Semi has been consistent, and Broadcom also is comfortably in “the trillion plus club” at this point while Oracle materially fell off the pace the last 6 months.

The tech bellwethers weighed in with all positive this week with Oracle at #1 mounting a comeback from its negative running returns over 6 months. As highlighted in an earlier chart, the Semiconductor ETF (SOXX) has been soaring and added another 11.7% this week to its 40.5% month and 173% trailing 1 year.

Meta (META) remains on the dog list as one of the underperforming Mag 7 names with negative returns over 1-month, 3-months, and 6-months and only +2.26% over 1 year. Microsoft (MSFT) has similarly struggled in the software camp with a negative return over 6 months and 1 year.

The commentary below is a cut-and-paste from our post on LinkedIn with some edits:

The group of 32 benchmarks and ETFs we monitor posted a score of 24-8 with a major performance differential between the tech-heavy top quartile and negative returns in the bottom quartile.

The broader market benchmarks got a lift as earnings season gradually winds down with tech influence serving as a big driver of headline index performance. We see the NASDAQ, S&P 500, Russell 2000, and Midcaps S&P 400 (MDY) all in the top quartile. Even the Equal Weight S&P 500 (RSP) was in the upper end of the 2^nd quartile. Tech has done so well that the RSP ranking this week might lull one into a sense of market breadth, which is clearly not the case as of the end of the week.

We cover the booming tech sector performance – notably in semis – in a separate “Tech Check” return post to follow in this commentary. The performance of the Tech ETF (XLK) is way ahead of this group this week with NASDAQ at #2, the Equal Weight NASDAQ 100 ETF (QQEW) at #3, and the tech-heavy S&P 500 at #5 with only the Emerging Market ETF (VWO) breaking up a tech sweep in the top 5.

With the on-again, off-again Iran War and ceasefire disinformation and “status report” sleights of hand, oil has swung wildly. The upstream E&P ETF (XOP) and diversified Energy ETF (XLE) can rebound and plunge each week with the latest swing in oil prices. For this week, XOP returns came in last with XLE just ahead of it. The return on the Midstream ETF (AMLP) was also in the bottom quartile but at the upper end. WTI ended the week at just over $95 per bbl after closing last Friday at just under $102.

All the bond ETFs were slightly positive this past week, but FOMC handicapping will get a test this coming week with April CPI and PPI releases. The payroll numbers beat expectations this past week and JOLTS were mixed (see Employment Situation: April 2026 5-8-26, JOLTS March 2026: Openings Down, Hires Up, Layoffs/Discharges Up 5-5-26).

The payroll mix was suboptimal and the direction of jobs in manufacturing remained negative for the month and even more in the red YoY. The payroll adds remain dominated by “health care and social assistance” and “leisure and hospitality.” That is not exactly the high multiplier effect jobs and reshoring theme pitched by the tariff strategy.

The question around FOMC flexibility looks like it will come down to oil prices unless jobs face some major setbacks. Oil and inflation has a history in the US that borders on being a deep scar from the late 1973 to early 1975 stagflation period and the 1980-1982 stagflation double dip.

The commentary below is a cut-and-paste from our post on LinkedIn with some edits:

The weekly Tech Check for tech equity price returns highlights another extraordinary week for semiconductors and the headline chip stocks. The pattern is consistent with recent weeks but we see a broader group with 20+% handle and even 30+% handle returns for the leaders during just a single week. The Hi-Lo range of over 46% is striking and especially when the bottom performer (Zillow) was only in single-digit negative range at -8.5%.

For the week, the positive-negative score was 26-6. The semis led the pack and numerous software and SaaS-based service names were again in negative range. This week’s performance in the top 4 names would be a good year for a typical stock with Micron (MU) at +37.7%, Advanced Micro (AMD) at 26.2%, Intel (INTC) at 25.4%, and Qualcomm (QCOMM) at +23.8%.

The bottom quartile is led by the same software and SaaS service players that have struggled badly with the “AI panic” on business models and AI displacement. The bottom quartile above includes 7 of 8 names that are in the bottom quartile YTD. We look at that mix in the broader asset return timeline in a chart further below.

On a YTD basis, the bottom quartile includes Adobe (ADBE) in addition to the above bottom quartile from this week – ex-Meta. Microsoft (MSFT) just missed the bottom quartile this week with META the only Mag 7 names in the bottom tier. On a YTD basis, MSFT just missed the bottom quartile by a single notch.

A notable miss from the top quartile this week was NVIDIA (NVDA) at the top of the 2^nd quartile. As such a highly visible name and arguably the leader of the boom, it is notable that NVDA’s YTD return only ranks #13in the above group just behind Amazon (AMZN) and ahead of Russell 2000 in the rankings.

The Mag 7 were spread around the weekly quartiles again this week with Tesla (TSLA) in the top quartile, NVDA and Apple (AAPL) and Alphabet (GOOGL) in the 2^nd quartile, MSFT in the 3^rd quartile, and META in the bottom. The NASDAQ was in the 2^nd quartile of this mix with the S&P 500 and Russell 2000 with Midcaps in the 3^rd quartile.

The rolling 1-month period for the broad mix of assets and sector ETFs posts a 25-7 positive vs. negative score. We see a mixed bottom tier showing some adverse moves in duration and slightly lower oil prices over the timeline. As we look across these performance charts and timelines, the main events for the outperformers are the tech rallies with some side stories on select industrials and energy related names.

We see NASDAQ, S&P 500, and even Russell 2000 get some tech lift from earnings season support with 4 of the top 5 being about tech (XLK, NASDAQ, QQEW, S&P 500) with arguably 5 of the top 5 with tech also an important contribution to small cap performance.

The Industrial ETF (XLI) fell off the pace this month while Consumer Discretionary (XLY) made a move back into the top quartile. Consumer Discretionary (XLY) had a banner month from its outsized holdings in Tesla (TSLA) and Amazon (AMZN) as we cover in the separate Tech Check details for the trailing 1 month. With consumers under a cloud right now, the XLY mix showed a fair amount of dispersion in the returns of the major holdings with names such as Home Depot, TJX, McDonald’s, and Lowes struggling but some positive surprises (e.g. Starbucks).

Where the UST curve and inflation go from here along with FOMC policy is intertwined with the obvious wildcard – oil. The market also has a little more confidence that a deal will get struck and Trump’s priority is to avoid boots on the ground (after all, the “war is over”). We see the UST ETF (GOVT) in the bottom quartile in the red zone along with the long duration 20+Y UST ETF (TLT). For this measurement period, we also see the Energy ETF (XLE) and E&P ETF (XOP) along with Materials (XLB) in the red.

In terms of the Iran War risks in recent weeks and what lies ahead, more dramatic strategic errors in this misadventure and erratic strategy could bring more problems. The risk to avoid is massive escalation that further damages the Gulf infrastructure and exacerbates supply chain stress. More aggression or stalling could keep the Strait shut for even longer.

The risks are not hard to speculate about where escalation pulls in the Houthis and slams the Red Sea routes shut. That scenario is almost as obvious as was closing the Strait if Iran was attacked in the first place. Other outlying escalation mistakes would be those that could trigger Iraqi Shiite militia, prompt China to become a more active supplier to Iran, and statements that could lock the door on EU support to the extent anything can even be gained at this point.

The 1-month Tech Check is consistent with the trends discussed in various charts herein and in recent weeks, but the past week was especially impressive right up to the rally on Friday as discussed earlier. The score for this mix over the past 1-month timeline was 28-4.

The bottom 3 are familiar names in the bottom tier in negative with ServiceNow (NOW), IBM, and Palantir. We discussed Meta in other charts herein. The weakest performers on this list are consistent with what we see YTD with software getting pounded and SaaS business models being revalued.

The YTD Tech Check continues to be an eye opener with the software and SaaS service slaughterhouse very much in evidence on the right side of the chart. The positive vs. negative score of 19-13 also brings an outsized Hi-Lo differential of 279 points. Throw out the Hi and Lo and you still get 202 points. That is over less than 5 months of returns. It took 28% to make the top quartile YTD. The median return YTD in this group is 10% and then drops off sharply.

The bottom quartile runs from IBM at -22.4% down to ServiceNow (NOW) at -40.5% as the AI panic has hit software companies and SaaS-based service operators hard and even business viability questions have been raised even beyond just price, volume and margin challenges. Those sell-offs are as speculative as some of the multiples and growth rates applied to AI and the supplier chain. The pain for software et al. is the flip side of the AI optimism.

We have already looked at the return home runs for semiconductor names that dominate the top quartile. The run rates right now are impressive as evident in the latest quarterly earnings reports, so that part of the equation is not speculative and is very much in the “now” category.

For the Mag 7, we see Alphabet (GOOGL) in the top quartile. Amazon (AMZN) and NVIDIA (NVDA) are in the 2^nd quartile, and the remaining 4 (AAPL, TSLA, META, MSFT) in the 3^rd quartile.

The 3-month return timeline above covers the broader range of 32 benchmarks and ETFs, and we see a score of 22-10. The 3-month horizon starts before the Iran War. Interest rate sensitive assets took a hit. Adverse duration impacts saw negative return for the UST ETF (GOVT), the long duration 20+Y UST (TLT), and IG Corp ETF (LQD). Homebuilders (XHB) suffered on mortgage rates shifting into a range over and under the 6.5% line (using Mortgage News Daily surveys).

Financials (XLF) and Regional Banks (KRE) have had mixed results and are negative in the chart. The market could be experiencing a mix of doubts on the direction of interest margins (FOMC easing) and be considering questions on asset quality (notably private credit but also consumer loans and mortgages). Some in the market could feel a sense of cyclical worry that can come with the Iran War fallout and raise legitimate questions on future loan demand and consumer spending.

The 1-year timeline remains uninterrupted at 31-1 with only the BDC ETF (BIZD) in the red. We see 4 of the 7 bond ETFs in the bottom quartile but posting positive numbers. The credit-based bond ETFs (LQD, HYG, EMB) made it into the 3^rd quartile.

The strength of equity markets the past year is evident in the fact it took 35.5% to make the top quartile. The median return across the 32 asset lines is 20% and that is around 2x the long-term return on the equity asset class.

The valuation debates (excess or fair value), “calling the top,” and discussing breadth (tech domination, etc.) will stay busy, but there is no denying a strong trailing year. The fact that the S&P 500 back in 2007 pushed right through the summer 2007 credit paralysis (with hedge funds starting to blow up and Countrywide starting to spiral in need of a rescue) and the NASDAQ posting up +86% in 1999 are there for past vs. prologue debates that always unfold.

Many have pointed out that “credit leads” and that is also clear in past blowups. That is why the more bearish are looking to private credit as the signal. The pushback on credit theories is the current credit strength of the tech sector names and also dramatically less derivative excess and credit counterparty exposure this time around and a sound financial system.

For our part, we do not view private credit as the “pin in the grenade” despite the usual sloppiness when demand for assets exceeds the ability to properly price and evaluate assets in the context of fee hunger and “business building” to maximize AUM. That is a well-traveled trail and at least partly the case now. “Revenue line syndrome” is a constant across emerging asset classes and credit cycles. Dodd-Frank did not eliminate that; it just moved to a new home away from the banks. Those are discussions for other days.

See also:

JOLTS March 2026: Openings Down, Hires Up, Layoffs/Discharges Up 5-5-26

New Home Sales March 2026: Favorable Volume, Weaker Prices 5-5-26

Market Commentary: Asset Returns 5-4-26

PCE Inflation, Income & Outlays March 2026: Inflation Anxiety Level? 5-3-26

1Q26 GDP Advance Estimate: Consumer Fade, Investment Boom 4-30-26

Market Commentary: Asset Returns 4-26-26

Synchrony Financial: Favorable Consumer Credit Signals 4-24-26

Industrial Production March 2026: Mixed Picture, Big Questions Ahead 4-16-26

Existing Home Sales March 2026: New Beginnings or New Ends? 4-15-26

Producer Price Index March 2026: Heater or Curve Ball? 4-14-26

CPI March 2026: The CPI Cycle Could Prove Maddening 4-12-26

4Q25 GDP: More Adverse Revisions in the Golden Year 4-9-26

The US as an Aspiring Emerging Market: Fiscal SNAFU, Political FUBAR 4-6-26

JOLTS Feb 2026: Openings Down, Hires Down, Layoffs Up 3-31-26

Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

Housing Starts Jan 2026: Total Starts Up, Completions Up, Permits Down 3-12-26

The US as an Aspiring Emerging Market: Fiscal SNAFU, Political FUBAR 4-6-26

Market Commentary: Asset Returns 5-4-26

Glenn Reynolds, CFA — Mon, 04 May 2026 21:12:31 GMT

“The Hessians might think I am hiding in a ballroom. Who would do that?”

We saw shaky macro fundamentals in the 1Q26 GDP numbers and the latest inflation release, but the very solid 1Q26 earnings season and “forward revenue model game” in AI and tech are carrying the day. A wide range of potential outcomes remains a nagging and lagging reality to price into the market with equities rocking again and credit spreads tight (see PCE Inflation, Income & Outlays March 2026: Inflation Anxiety Level? 5-3-26, 1Q26 GDP Advance Estimate: Consumer Fade, Investment Boom 4-30-26).
The FOMC changeover is going smoothly enough with Pirro chasing her tail, but the oil wildcard, the payroll numbers this week, and the CPI/PPI next week will test the Fed as they move to set new FOMC policies on data priorities and communication practices during a critical period in coming months with stagflation chatter not going away.
The market saw 6 of 7 bond ETFs in the red the past week with the other 1 of 7 at 0%. 30Y Mortgage rates are above 6.5% (per Mortgage News Daily) as we go to print and are well above the recent low tick below 6.0%. Housing continues to struggle.
Geopolitics is intrinsically confusing and could potentially get more volatile with messaging inconsistent around War Powers requirements (60-day rule etc.) and Trump desperately looking to unwind without looking ridiculous. War Powers Act requirements could lead to one more constitutional problem with the GOP Congressional Castratos thinking about midterm elections.
Geopolitical strife goes beyond Iran with the EU and NATO relations complicating trade policies as well. The EU is under attack from Trump with German autos and threats against Spain seeing thin skin thickening the plot. Meanwhile, the USMCA review will get the tariff topic moving up the list of wildcards for the summer at a time when supplier chains are nearing a state of crisis in metals and fertilizer among other crucial product groups.

The above table updates the rolling time horizon returns for the main high-level benchmarks and indexes we track. We have seen the numbers swing from all negative for 1-month during late March to all positive to start May as detailed above (Market Commentary: Asset Returns 3-30-26). The UST index was barely positive for 1 month. During late March coming off the Iran escalation, the return lines were negative for the rolling 3 months also.

The above table updates the Tech Bellwethers and some relevant ETFs and market benchmarks. As we cover below in the tech check charts, the semiconductor names have turned in very strong numbers while the Mag 7 (and Mag 7+3) have seen a wide range of performances.

The dispersion across the Mag 7 is evident in the past month with banner returns from Alphabet and Amazon and very weak numbers from Tesla and Meta with the remaining 3 of the Mag 7 rounding to low double-digit range.

Of the “other 3” outside the Mag 7, Broadcom rode the rally to over +34% on the month with the volatile Oracle at 18.7% for 1-month (-34.2% for 6 months). The steady, reliable Taiwan Semi posted 16.6% for the month and over 33% for 6 months.

The 1-week returns for the 32 benchmarks and ETFs we monitor posted a score of 18 positive, 13 negative and a single line at zero for the HY ETF (HYG). The other 6 bond ETFs were negative. HY OAS was below the 300 bps OAS line in late Feb before gapping out to +346 bps by the end of March and touching down at +277 bps to end last week, tighter from +286 bps the prior week.

Among notable winners on the week in the top quartile, we see energy ETFs move higher on energy price moves with the E&P ETF (XOP) at #1, Energy ETF (XLE) at #3, and Midstream (AMLP) at #4. The recovery in BDCs (BIZD) this week was tied primarily to disclosure details and more effort from leading private credit investors to calm nerves with disclosure during earnings season. Rounding out the top 5 was Regional Banks (KRE).

Rising mortgage rates and weak quarterly numbers and unimpressive guidance for the peak selling season ahead left Homebuilders (XHB) in last place for the week at -3.1%. Concerns around the UST curve linger with oil a critical variable in market pricing.

The Tech Check weekly numbers were coming off a very good run as we detail below in the April performance numbers. This latest week was mixed, however, with a score of 23-9 but with a more diverse mix of negative return lines in evidence by subsector. This week included more weakness from some major semiconductor-related names that included NVDA, AMAT, TSM, ORCL, and AVGO. We see 3 Mag 7 names in the red with META, NVDA, and MSFT along with the 3 names from the “Mag 7 + 3” with TSM, ORCL, and AVGO all in the bottom quartile in negative range.

The SaaS-heavy services names have been taking the beating as we have detailed along the way and in other charts herein, but only Zillow (Z) was in the red of that peer group this week. Most of the SaaS services names were positive and in the 2^nd and 3^rd quartiles this week.

For the top performers, we see Intel (INTL), Qualcomm (QCOM), and Micron (MU) in the top 4 joined by Advanced Micro (AMD) in the top quartile. Meanwhile, the Mag 7 shows Alphabet (GOOGL), Tesla (TLSA), and Apple (AAPL) in the top tier. The bottom tier includes 3 Mag 7 members with META, NVDA, and MSFT.

The above chart updates total returns of the calendar month of April (we skip Friday May 1) since this could be a month we are supposed to remember as the best month since the COVID year of 2020.

The comments below are essentially a cut-and-paste of our LinkedIn post on Saturday with some edits and additions:

After a March beatdown on the back of the Iran chaos, which brought a wide swath of negative returns in both debt and equities, April posted up the best single month since 2020 (per WSJ, since April 2020 and Nov 2020). The 27-5 positive vs. negative score below marks a dramatic swing from the rolling monthly returns we saw near the end of March (Friday 3-27 pricing). March was 3-29 with the only 3 positive being energy ETFs (XLE, XOP, AMLP).

The chart details the April total returns (through 4-30-26) for the 32 benchmarks and ETFs we monitor. We use the March 31 close as the starting point. April shaped up as a special month, so we thought it worth highlighting the calendar month returns rather than the usual Friday close numbers. We post a separate “Tech Check” collection using price returns.

The bullish tech mindset and a good earnings season has kept stock investors looking beyond the geopolitical chaos and erratic, inconsistent, and unpredictable policy “execution.” Valuations are looking past Iran and oil and are not discounting in setbacks in the consumer sector or in FOMC policy with the “new guy” on the block soon to settle in.

The PCE inflation numbers released for 1Q26 were flashing 4% handles for headline PCE (4.5%) and also for core PCE (4.3%), so this is about more than just oil stories and also about tariffs, supplier chain challenges ex-oil, and the flow-through effects of energy costs in so many different areas from raw materials to power to tech and household products. The March monthly PCE release also showed a sequential rise to 3.5% from 2.8% and core PCE to 3.2% from 3.0%.

The Hormuz supplier chain crisis unfolding across numerous major sectors gets a lot of headline time with fertilizer and fears around agricultural sector financial stress extending to fears of a global food crisis. Challenges to the tech sector also lurk, but Middle East anxiety clearly did not slow down the April boom in semiconductor tech equities.

The top quartile in the chart shows how tech flowed into the leaderboard with the Tech ETF (XLK) at #1 and NASDAQ at #2. The small cap Russell 2000 and S&P 500 also took a spot in the Top 5 with Midcaps the only broad benchmark in the second quartile.

We see 5 of 7 bond ETFs in the bottom quartile as the UST curve will keep wrestling with the setbacks in inflation and how that could flow into the UST curve. The new FOMC head (Warsh) is clearly seen as biased toward easing regardless of his spin during the confirmation process, but rising inflation alongside rising oil has a very challenged history across the decades. The stagflation of the Arab oil embargo in late 1973 and revisited in the Iranian oil crisis of 1979 was lived pain for many or textbook econ class lessons for others. There are some big moving parts to play out, and the political overtones are thickening the plot.

The above chart updates price returns of our Tech Check list for the calendar month of April (we skip Friday May 1). April 2026 could be a month we are supposed to remember as the best month since the COVID year of 2020.

The comments below are essentially a cut-and-paste of our LinkedIn post on Saturday with some edits and additions:

The Tech Check chart for the month of April flips the script on the ugly returns seen in March (rolling 30 days 3-27-26) when the positive vs. negative score was 4-28 with the broad benchmarks and the Mag 7 all in the red. For April, we see the Mag 7 and the Mag 7+3 all positive but with the Mag 7 spread around all 4 quartiles with Alphabet (GOOGL) and Amazon (AMZN) in the top quartile and Tesla (TSLA) in the bottom.

The fears of discount rate penalties related to UST curve shifts and cyclical end market weakness from Iran-related shocks seemed to quickly fade from view with investors doing the “forward-looking thing” and pricing in limited downside for semiconductors. The top 5 names for the month racked up some dazzling numbers with Intel (INTC) in a different zip code. INTC posted 114% at #1 with #5 Qualcomm at 39.5% for a single month. We see #10 Cisco (CSCO) at 17.9% and #14 NVIDIA (NVDA) at 14.4%.

The score for April of 27-5 shows the small subset of negative returns mostly comprised of the SaaS-heavy names that have been battered by AI displacement fears around business model viability. IBM is a unique multi-business tech bellwether, but IBM’s post-earnings beatdown was generally attributed to that same AI-based anxiety.

The SaaS-based operators and software names keep taking a beating with ServiceNow (NOW) on the bottom at -15.5% joined in negative range by Intuit (INTU), Salesforce (CRM), Palantir (PLTR) and IBM. The Semiconductor ETF (SOXX) at 40.4% vs. the Software ETF (IGV) at +4.8% in the bottom quartile shows a return differential of almost 36 points. The median for the 32 asset lines for the month was over 10%. That was quite a performance in the peer group. This market is a stock picker’s curse or delight.

We update the YTD Tech Check group above with a positive negative score of 18-14. The top quartile mix shows 7 of the 8 in the semis sector joined by Alphabet at #7. Making the top quartile required a price return of over 21.7%, so that is quite a performance across just over 4 months.

As we have shown in recent commentaries, the bottom quartile in the red is all about SaaS-based services companies and software. The bottom quartile begins with Palantir (PLTR) at -18.9% and finished with ServiceNow (NOW) in last place at -40.5%. With Intel at #1 at +170%, that is a shocking Hi-Lo range of around 210%. Throwing out the Hi and Lo, we still see a return differential of 130 points for Micron vs. Intuit.

The 3-month returns show energy ETFs (XOP, XLE) well ahead with the Tech ETF (XLK) a solid #3 with Midstream Energy (AMLP) at #4, and Transports (XTN) at #5 on a wild ride. The bottom tier is diverse but has a common feature in more than half the mix of interest rate sensitivity. Homebuilders (XHB), the long duration UST ETF (TLT), and longer duration IG Corp ETF (LQD) were hit, and we see Financials and BDCs facing some questions around the direction of funding costs or asset quality (or both).

The trailing 1-year returns offer a story of a strong 2025-2026 stretch. The median across the 32 lines is around 21%, and that is a very good run at around 2x the long-term return on the equity asset class. We see #1 with the E&P ETF (XOP) at 60.5% with much of that recently generated. Making the top quartile required a minimum of 34%. The Tech ETF (XLK) rang up +52.8%.

The Russell 2000 small caps wins the benchmark crown at +44.2% just ahead of the NASDAQ at 42.7%. The S&P 500 was down in the second quartile at +30.6% with Midcaps a few notches behind at +28.4%.

We see 5 of 7 bond ETFs in the bottom quartile with the long duration UST ETF (TLT) in second to last and less than 1% total return. We see EM sovereigns ETF (EMB) at 12.2% and the HY ETF (HYG) at 8.4%. That implies credit risk was rewarded more than duration.

The bottom quartile was 8.1% and below with BIZD at -0.64% in last place - not as ugly as feared - with many holding the line and clipping high cash dividends to ease the price pain.

1Q26 GDP Advance Estimate: Consumer Fade, Investment Boom 4-30-26

Market Commentary: Asset Returns 4-26-26

Synchrony Financial: Favorable Consumer Credit Signals 4-24-26

Industrial Production March 2026: Mixed Picture, Big Questions Ahead 4-16-26

Existing Home Sales March 2026: New Beginnings or New Ends? 4-15-26

Producer Price Index March 2026: Heater or Curve Ball? 4-14-26

CPI March 2026: The CPI Cycle Could Prove Maddening 4-12-26

4Q25 GDP: More Adverse Revisions in the Golden Year 4-9-26

JOLTS Feb 2026: Openings Down, Hires Down, Layoffs Up 3-31-26

Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

Housing Starts Jan 2026: Total Starts Up, Completions Up, Permits Down 3-12-26

The US as an Aspiring Emerging Market: Fiscal SNAFU, Political FUBAR 4-6-26

Market Commentary: Asset Returns 4-26-26

Glenn Reynolds, CFA — Sun, 26 Apr 2026 23:39:57 GMT

Hormuz negotiating team. Plan B.

Another oil spike this past week is tied to “blockading the blockade” as it sent WTI back above $94 by Friday close from below $83 the prior Friday close. The supply shock and supplier chain fallout now are open-ended with no defined deadline and a stalemate that keeps the lag effects of the supply shock stacking up.
The focus on “record NASDAQ” and “record S&P 500” on Friday led the headlines with a mixed tech rally favoring semiconductors vs. SaaS/software names that left numerous subsectors still in a negative zone for software and SaaS services.
The week ahead tees up the advance estimate for 1Q26 GDP after a very weak set of 4Q25 numbers and growing uncertainty around how long the consumer sector can absorb the headwinds (see 4Q25 GDP: More Adverse Revisions in the Golden Year 4-9-26).
The market will see 5 of the Mag 7 report this week (AMZN, GOOGL, MSFT, META, AAPL) with the Personal Income and Outlays report bringing a read on PCE inflation and how aggregate consumer spending is holding up vs. disposable income. Ford and GM as auto bellwethers will bring some color on the spring selling season, tariff impacts, expected fallout from Iran, and any updated color on EV strategies in the new world of Trump policies.
The FOMC meeting is likely to be the swan song press conference for Powell after Pirro (of Fox personality fame who was appointed by Trump to the Washington DOJ) “sort of” dropped the investigation of Powell in her usual dubious fashion. The statement included a veiled threat to reopen the case. Given the lack of evidence, a competent DOJ could clear up the case now. The judge already found “essentially zero evidence.” As we go to print, Tillis has indicated over the weekend that Pirro’s questionable statement cleared the bar and he will advance Warsh.

The above table breaks out the various timeline returns for the high level equity and bond benchmarks we monitor. Equities show a very strong month on the way to all positive numbers for 1, 3, and 6 months after some earlier rough patches post-Iran that generated a wave of negative numbers in March (see Market Commentary: Asset Returns 3-30-26).

The equity market rebound was capped off with record highs Friday for the S&P 500 and NASDAQ as the market is looking past the Hormuz stand-off and putting the bombing and Iranian wildcard in the rear-view mirror. That is a leap of faith embracing a rational and constructive outcome during a period of the irrational and destructive.

The rolling return visual

The symmetry of benchmark and ETF returns across the above time horizons showed a week biased to the negative side as covered further below. The 1-month, 3-month and LTM periods show a much healthier mix with tech still strong on balance in 2026 and some benefits of sector rotation after tech multiples went to such lofty levels. The market then saw a combination of cyclical comfort or at the very least “recession avoidance” despite lower GDP and soft payroll. Solid earnings expectations in 1Q26 narrowly and 2026 overall has been a tailwind.

The Magnificent 7 heavy ETFs…

The above chart updates the tech bellwethers and useful broad market indexes and ETF comps across a wide range of time horizons. We cover more single tech names and subsectors in our “Tech Check” charts further below, but these names include the Mag 7+3 (the “3” being Broadcom, Oracle and Taiwan Semi).

The Semi ETF (SOXX) took the top spot by a comfortable margin led by big numbers from a range of chip players on the week as broken out in the “Tech Check” returns below. Among big winners this week were Intel (INTC), Taiwan Semi (TSM), Texas Instruments (TXM), and Advanced Micro (AMD) among others.

The commentary below is mostly a cut-and-paste from an earlier post on LinkedIn on Saturday with some additional input:

The weekly return chart for the 32 benchmarks and ETFs we track are more mixed than might be assumed with headlines citing all-time highs for the S&P 500 and NASDAQ to close Friday. The chart shows 13 positive and 19 in negative range for the week.

A good start to the earnings season was not enough to fully offset setbacks in the Strait of Hormuz. The S&P 500 hit a record on a modest weekly gain that saw 5 of the 11 S&P sectors positive and 6 negative. Tech excitement bolstered the large caps as we cover in the separate weekly Tech Check review.

There is no end in sight for crude oil uncertainty, and the reverberating supplier chain disruptions linger from chemicals (e.g., fertilizers) to base metals (notably aluminum) and numerous other key supplier chain links.

The carefully crafted (sarcasm alert) blockade response to the blockade is getting bad reviews in the world of geopolitics and in domestic politics (sycophants excluded). More significantly, the open-ended closure is getting a bad review in the world of supply and demand as threatening lag effects loom. WTI moved from $82.59 last Friday to $94.40 this Friday. Energy ETFs made the top quartile with the E&P (XOP) at #1, the Energy ETF (XLE) at #3, and Midstream (AMLP) at #4.

The Tech ETF (XLK) held down the #2 spot with the NASDAQ at #5 and the Equal Weight NASDAQ 100 ETF (QQEW) at #6. The Friday move in Intel (INTC) of +23.6% ($415 bn market cap) was a headliner with Advanced Micro (AMD) outperforming Intel for the week as both posted 20% handle returns.

In what might have been a surprise, the Homebuilder ETF (XHB) made the top quartile despite weakness in housing markets. We get housing starts released this week, but the industry backdrop did not preclude a strong performance by numerous building suppliers in the XHB. Large homebuilders were mixed, but bellwether names such as DR Horton and Taylor Morrison were both positive in what will be a mixed earnings season for builders.

Sitting on the bottom of the returns was the Transports ETF (XTN), which is the flip side of the strong energy performance. For XTN, diesel costs and jet fuel will remain major problems that will hit airlines and challenge freight and logistics companies. Volume fears also weigh on cyclical sentiment. The Transport ETF (XTN) company mix posted a wide range of returns across the various business line concentrations.

We saw the BDCs (BIZD) post another negative week as the forward calendar will bring a lot of BDC reporting details to the market to help frame where the generalizations end and more nuanced details begin on private credit risks. Financials had a slow week with the Financials (XLF) and Regional Banks (KRE) both negative as the UST curve backed up and oil risk remains a recurring drag. All 7 bond ETFs were in the slight negative range.

The FOMC story line on easing is mixed. The Warsh hearings appeared to be a net perception negative on a lack of responsiveness and evasive, ambiguous answers. His refusal to answer simple questions like “Did you have any investments with Epstein?” or “Who won the 2020 election?” colored his partisan commitment. It would have been easier to say “no” (if it was “no”). That said, Warsh brings stellar qualifications even if it is clear to many that he will be a Trump servant. UST bulls hope that Warsh is smoother and more open and convincing with his FOMC voting peers than he was in his rubber stamp hearings. He will need to win over economists to get the easing votes. As we go to print, the FedWatch Oct FOMC meeting date shows a 68.9% chance of unchanged fed funds and 26.9% chance of 1 cut. The odds have been whipping around since Iran.

The commentary below is mostly a cut-and-paste from an earlier post on LinkedIn on Saturday with some additional input:

The weekly price return chart for the 32 market benchmarks and tech bellwethers show semiconductor names experienced an outsized rally week. We see a positive to negative score of 21-11 with semis leading the top quartile and software-related names clustered in the bottom quartile.

We see the Mag 7 names spread across the 4 quartiles with Amazon (AMZN) in the top quartile and Tesla (TSLA) in the bottom tier. The “Mag 7+3” posted 7 with positive returns and 3 negatives with TSLA, Meta (META), and Oracle (ORCL) in negative return range. The top performers across that group of 10 were Taiwan Semi (TSM) and AMZN in the top tier.

The big news on the week was Intel (INTC) earnings, which drove a monster rally on Friday of over 23%. As of Friday, that puts the INTC return for the trailing 1 year at +284% or over 9x the S&P 500. As a frame of reference, INTC’s struggle from May 2021 to 2Q25 saw around a -61% return vs. +48% for the S&P 500. INTC’s comeback is obviously impressive.

Headlines around massive layoffs at Amazon and Meta will keep payroll anxiety high in the tech sector after a serious bout of AI displacement jitters had been rising around the SaaS-heavy service operators. There is still a lot of concerns around how their business models will hold up under an expected AI onslaught that has richly rewarded the semiconductor names. The Semiconductor ETF (SOXX) was #3 on the week while the Software ETF (IGV) was able to edge into a slight positive return in the lower half of the 3rd quartile.

Software returns have presented a stark contrast with semis. Software faces a lot of bearish commentary from the equity markets and over in private credit. This week saw ServiceNow (NOW), FactSet (FDS), Zillow (Z), and Salesforce (CRM) in negative range in the bottom quartile. The bottom quartile of the “Tech Check” list for the YTD period is dominated by the SaaS-heavy services names with YTD returns running from -19% to -41% for the bottom tier. We detail that trend further below.

IBM reported earnings this week and returns were hurt again. IBM is an iconic legacy name cutting across a range of subsectors. IBM had a decent 1Q26, but IBM equity still ended up sitting on the bottom for the week at a -8.5% return. The market color was still more about the general anxiety effects the market has seen in services companies tied to potential AI fallout. IBM is in the bottom quartile for the week and over 1-month is in the red with the same for the YTD timeline.

The 1-month score of 28-4 was a solid rally off the initial beating on Iran fears that spread to bonds, inflation risk, the consumer, and the cycle. FOMC second guessing gave way to some mild optimism that easing was more likely than tightening. We see the 3 energy ETFs on the bottom, as oil prices are lower now over that 1-month period even if still materially above the $67 WTI of late Feb 2026.

The 1-month Tech Check weighs in at 26-6. The bottom tier is dominated by SaaS-centric services operations and software exposure. The top quartile shows 5 semiconductor names and the Semiconductor ETF (SOXX) with Amazon and Aphabet. We see 3 of the Mag 7 in the top tier. Intel (INTC) and Advanced Micro (AMD) were off the charts followed by the SOXX and Broadcom (AVGO).

The worst performers again were comprised of the SaaS-based services and software names along with TSLA. The Software ETF (IGV) was back in positive return range but in the bottom half of the 3^rd quartile.

The YTD story in the Tech Check mix is staying the course of where we have been in recent weeks with Semis big winners and Software and SaaS names big losers. The overall score is 17-15. If we remove the broader market ETFs (S&P 500, NASDAQ, Midcaps, Small Caps), the score is 13-15.

The bottom quartile is dominated by names victimized by the AI mini-panic and threats to those business models. The bottom quartile is bracketed by a -19.5% return on PLTR to a low of a -41.14% return on NOW.

The 3-month timeline includes around 7 weeks of post-Iran turmoil with a score of 24-8. The bottom tier includes weaker performances by BDCs (BIZD) on the bottom and weakness in Financials (XLF) and Health Care (XLV). Homebuilders (XHB) also struggled while the long-duration UST ETF (TLT) was in the red. Some of the mixed tech equity behavior is seen in the weak numbers from Communications Services (XLC) and the Equal Weight NASDAQ 100 ETF (QQEW).

The winners were naturally led by energy assets and power (XOP, XLE, AMLP, XLU) with the Tech ETF (XLK) and NASDAQ in the top tier. We see 6 of 7 bond ETFs in positive range. While NASDAQ was the winner over 3 months, the Russell 2000 small caps ranked higher than the S&P 400 Midcaps and the S&P 500.

The LTM returns score of 31-1 drives home what a good run it has been for equities with the secular boom in some large cap emerging growth areas in tech (AI, Semis). The solid corporate sector earnings overall have been reassuring despite tariffs and weak GDP growth. An easing cycle and expectations of more Fed support has helped. The risks of tariffs and energy turmoil will test Fed policy direction and global growth.

Trade war risks loom larger now with so much enmity fostered with the EU and Canada tied to Trump policies. The Middle East and economic risks are the worst since 1973 when the main event was Israel vs. the “Arab nations.” This time the US is the critical driver of the next steps in the war (a blockade of Iran is an act of war under international law).

There are no easy solutions at this point. The choices of escalation or sustained energy and supplier chain chaos both could bring economic damage. Blaming the EU and/or NATO is absurd and only sets off more chain reaction economic risks. This one will be taught in the future in history classes and military academies around “what not to do” if you want an easy way out.

Nationalism looms large from China to Russia to North America at a time the NATO foundation is crumbling, and the US defense budget is rising by 50% with budgets already stretched. Financing it requires demand for dollars and UST, which is not an easy assumption.

Event-driven handicapping is never easy when geopolitical conflict is on the menu. For now, the markets just assume “we will get past this.” Iran, the Gulf “partners,” China, Russia, Ukraine, and trade partners like Canada and Mexico may see the world differently.

Market Commentary: Asset Returns 4-19-26

Industrial Production March 2026: Mixed Picture, Big Questions Ahead 4-16-26

Existing Home Sales March 2026: New Beginnings or New Ends? 4-15-26

Producer Price Index March 2026: Heater or Curve Ball? 4-14-26

CPI March 2026: The CPI Cycle Could Prove Maddening 4-12-26

4Q25 GDP: More Adverse Revisions in the Golden Year 4-9-26

JOLTS Feb 2026: Openings Down, Hires Down, Layoffs Up 3-31-26

Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

Housing Starts Jan 2026: Total Starts Up, Completions Up, Permits Down 3-12-26

The US as an Aspiring Emerging Market: Fiscal SNAFU, Political FUBAR 4-6-26

Market Commentary: Asset Returns 4-19-26

Glenn Reynolds, CFA — Mon, 20 Apr 2026 01:01:02 GMT

In the cross-eyed eye of the beholder.

Geopolitical events and policy reaction fall into the “erratic is as erratic does” state of affairs. The Strait of Hormuz opened and closed again within 24 hours with a blockade of Iran continuing and the US military trying out its shoot-and-board operations on Sunday.
The military action against Iranian ports (a blockade is an act of war under international law) is a policy that is not yet showing enough room to maneuver if Trump’s goal is to declare victory and escape. The Houthis are on standby and the very strong desire to avoid boots-on-ground escalation is obvious even if a self-inflicted wound can never be ruled out with Team Trump.
Like many, we are not sure how much weight to give to logic on how this all plays out. Iran cannot be broken by threats and the willingness of religious zealots and the “bomb vest crowd” don’t fit into easy profiling strategies. Misjudging an opponent is easy to do when you think only about your advantages. The famous history book “The March of Folly” has a subtitle of “From Troy to Vietnam,” and that just sounds bad. The hope is that Team Trump will avoid writing its own chapter. There are plenty of small and large parallels in that book to Team Trump. That is a story for another day. The broad military purges did not help.
Despite the bad ending to the week after the close, the UST curve rallied and equities soared as we detail in the charts below. Some oil industry watchers were highlighting the threat to oil supply remains, and the rally to $83 on WTI futures (almost $11 of that on Friday) is extremely optimistic. As the markets opened up Sunday evening, WTI oil futures are heading higher by almost $7 as we go to print and equities are moving lower. This will be a busy week for US-Iran back and forth.
The major financials weighed in this past week, and the numbers are solid and offer some support that volatility in the headline themes (“war is hell”) and the flow-through risks of oil prices into consumer health, cyclical trends and stagflation risk will need time to play out – but from a strong starting position. Higher inflation and a very weak 4Q25 GDP print (the advance 1Q26 GDP numbers are released April 30) are not inspiring but earnings season will be favorable. Despite all the private credit risk unknowns on quality of marks (obviously low quality), broader credit contraction is not a front burner risk.
Consumer credit bellwethers Capital One (COF) and Synchrony Financials (SYF) turned in strong stock performances on the week and for the trailing 1-month period, so that offers some comfort for markets along with the major bank color. More regionals and small banks earnings reports are ahead.

We look across asset class returns below, but we thought it worth highlighting the 1-week UST deltas above (Friday close). The above details the UST moves this past week with the deluge of news flow and wave of big bank earnings. Inflation fears eased and FOMC odds shifted.

We will see this week how oil reacts and flows into curve risk as negotiations resume and misinformation flows freely. The UST rally from 2Y to 10Y that we see above helped all the bond ETFs post positive returns this week. We see another FOMC meeting later this month, and that seems far away given the Iran backdrop.

Above we update the UST deltas for the YTD period in what was an adverse move.

“I did it my way” could apply to a lot of bad actors across history…

The equity markets and bond asset class had tailwinds on the week as we detail below, but the challenge is pricing the risk on a forward basis despite some very unpredictable moving parts. Even as markets should be pricing for the next round of geopolitical news, the range of potential outcomes is just too wide.

The logic of the good scenarios are just as easy to frame as massive downside and escalation (Houthis weigh in, rockets and drones flying all over the Gulf, Iraq militia joins the party, too many US boots-on-ground, Israel gets busy again, etc.).

That set of military and oil risks would drive FOMC policy more than a new Fed chair with an axe to grind. Meanwhile, Trump is threatening to fire Powell while replaying Sinatra songs in a truth social post (“I did it my way”). That Sinatra classic was recorded in 1968 (the year when Trump dodged the draft and met the Vietnam challenge “his way”). Trump should have gone with “Luck be a lady tonight.” After all, gambling is more relevant to the decision (Guys and Dolls).

The above table updates the rolling time horizon returns for fixed income and equities. A couple of good weeks in April made all the difference with the 1-month and 3-month returns all in positive range for equities and debt. That was especially the case in equities after posting a very impressive rally following a grim March (see Market Commentary: Asset Returns 3-30-26). The above table has now flipped back from all negatives in debt and equities to end March in 1-month and 3-months into the current profile of all positive.

The rolling return visual

The symmetry of returns clearly shifted into April as peace threatened to break out. For now, that peace is highly uncertain in the Gulf with the policy strategy more a matter of what markets might speculate will unfold rather than what is a more rational outcome across irrational parties.

The Iranian game plan is intrinsically overlapping with religion while the US toggles between a focus purely on national security (nukes that had been billed as “obliterated” not long ago) and an uncertain mix of religion and brinkmanship from Hegseth, who spends far too much time attacking the media in his updates and openly brings his evangelical extremism into briefings.

Add Team Trump’s public dispute with the Pope, and it safe to say the White House and Defense leaders have not delivered FDR-style pep talks.

Hegseth really went off the rails in an Iran update this week, calling the media “Pharisees” and quoting Mark 3:1-6, which implies Trump is Jesus. That did not get much follow-up coverage from the mainstream media who are semi-cowed these days. Hegseth’s routine was flat out bizarre.

The following took too much of Hegseth’s briefing:

From the Book of Mark 3:1-6 (KJV)
1 And he entered again into the synagogue; and there was a man there which had a withered hand.
2 And they watched him, whether he would heal him on the sabbath day; that they might accuse him.
3 And he saith unto the man which had the withered hand, Stand forth.
4 And he saith unto them, Is it lawful to do good on the sabbath days, or to do evil? to save life, or to kill? But they held their peace.
5 And when he had looked round about on them with anger, being grieved for the hardness of their hearts, he saith unto the man, Stretch forth thine hand. And he stretched it out: and his hand was restored whole as the other.
6 And the Pharisees went forth, and straightway took counsel with the Herodians against him, how they might destroy him.

A former Fox news personality lecturing the media on honesty and facts is not without its intrinsic humor, but the religious extremism closes the gap on common style points with the Iranians on the other side.

Attacking the media at length and then citing the above passage was just flat out strange. The use of the Mark language by Hegseth basically says, “Trump is Jesus, the media are evil pharisees, and they are plotting to destroy him.” It is hard to read any other way even if they deny the intent.

I had 4 priests and a nun in the family, so no disrespect to the religious among us. Some of my great uncles were redemptorist missionaries during their time (primarily serving Latin America) and served when fundamentalist evangelicals raged against Irish and Italian Catholics and immigrants. Anti-Catholicism, racism, and xenophobia were rampant, and they griped about the Pope in those days also (Papists, etc.). We have come so far.

The impulse to politicize the military while invoking prayer and scripture in such extremist fashion further inflames the sense of domestic political risk linked to the authoritarian ambitions of the leadership team (see The US as an Aspiring Emerging Market: Fiscal SNAFU, Political FUBAR 4-6-26).

The Magnificent 7 heavy ETFs…

The above table updates the returns for the tech bellwethers and various benchmarks and ETFs. The tech rebound was impressive to say the least with the volatile Oracle (ORCL) rebounding sharply but still negative over 3 months and 6 months. Taiwan Semi (TSM) was the only name slightly in the red, but TSM has been a winner YTD in the top quartile group.

We see 6 of the Mag 7 ahead of the S&P 500 and 5 of the Mag 7 ahead of the NASDAQ. The Software ETF (IGV) made a major comeback this past week but is still negative for 1 month, 3 months, 6 months and 1 year. The Semiconductor ETF (SOXX) has been the big winner vs. the IGV across 1-month and back across the other time horizons.

The commentary below is mostly a cut-and-paste from an earlier post on LinkedIn on Saturday with some additional input:

We update the 1-week total returns on the 32 benchmarks and ETFs we track. The scale and breadth of the rally was impressive as the market closed confident that the Strait of Hormuz was open and that the two sides (Trump vs. Iran) could climb down from the brink with stagflation threats easing.
After the market closed, the headlines turned sour. The Strait is no longer open as we go to print after Iran had closed it again (and fired on a tanker). Trump was active on the screen Saturday with extreme optimism, but that is a day ending in Y. He was making heavy threats again by Sunday and a vessel was fired upon and boarded by the US military.

The market needs to handicap outcomes facing the recurring problem that the representations of Trump and Iran are seldom on the same “fact” page – let alone how to interpret the “facts.” On one side, we have Trump, who changes his set of facts and opinions when the wind blows. It does not help that he seems to have a few loose bolts of late. On the other side, we have religious fanatics that hate America.

One person can see Trump as a game theory guru and brilliant negotiator while another person sees a serial liar whose faculties are on a shaky fault line. The world economy is in the grip of these negotiations. China is holding back on the situation so far with Iran a massive oil supplier. The potential boarding of a Chinese bound vessel could escalate tensions.

The idea that Iran would agree to all Trump’s demands was strange enough. A logical sequence would be that the Houthis would perk up and Iran’s response to Trump would be “You want ‘the dust’? Come and take it.” It all gets very subjective quickly.

The moving parts present a wide range of potential outcomes. That can make for herd investing and momentum chasing by investors with a range of time horizons that start “by lunchtime” and extend from there. More than a few are hanging on insider leaks and the disinformation circuit.

The 27-5 score above reflected the discounting of major progress peaking with the “Strait is open” news. The energy ETFs (XOP, XLE, AMLP) are in the bottom 5 joined by Utilities (XLU) and the chemicals-heavy Materials ETF (XLB).

The Tech ETF (XLK), Equal Weight NASDAQ 100 ETF (QQEW), and NASDAQ benchmarks were in the Top 5. We look at tech bellwethers in a separate weekly “Tech Check.”

The Transports ETF (XTN) ranked #1 as airlines soared on Iran expectations and related fuel optimism that might bring moderation in upward fare pressures that to this point have not put a dent in volume guidance – yet. The AAL M&A speculation helped during the week, but AAL rejected that overture by the weekend. Freight and logistics providers rallied impressively on a range of factors from Iran and diesel to an easing of AI jitters threatening business models (e.g. freight brokerage). BDCs (BIZD) posted their best week in a while and made the top quartile. The private credit drama will stay hot and heavy with 1Q26 earnings season.

The commentary below is mostly a cut-and-paste from an earlier post on LinkedIn on Saturday with some additional input:

The weekly Tech Check price return chart shows a wild rally for a wide range of the tech subsectors after some recent punishment of SaaS-centric services and software asset lines. The Iran chaos has been a problem for cyclical fears and valuation metrics setbacks that combined with anxiety around tech sector business model threats from AI.

The past week rode the Iran relief and some calming around the tech industry post-AI scenarios for some SaaS services names to post a 30-2 positive to negative score. Only Applied Materials (AMAT) and Taiwan Semi (TSM) were in the red but with very slightly negative returns. It is worth noting that AMAT and TSM are in the top quartile for returns in this mix on a YTD basis.

For the suffering holders of recent underperforming tech stocks, we see some good news with the SaaS-centric names in the top quartile and upper end of the second quartile. We see Zillow (Z) and ServiceNow (NOW) in the top 3 with the Software ETF (IGV) and Adobe (ADBE) also in the top tier. Just across the line we see Intuit (INTU), Salesforce (CRM), and FactSet (FDS) in the upper end of the second quartile. Those equities – INTU, NOW, Z, CRM, and ADBE – are the bottom 5 on a YTD basis with negative returns from -30% handles to -40% handles.

The winners on the week include Oracle (ORCL) at #1 (+26.8%) after a rough stretch that still shows ORCL at -10% YTD. The Mag 7 were spread across the quartiles with TSLA and MSFT in the top tier for this week but still being in negative range YTD with TSLA at -10.9% and MSFT at -12.5%. The bottom tier included Apple (AAPL) and Amazon (AMZN). Across the Mag 7+3, ORCL was leading the pack at #1 with Taiwan Semi at #31.

For the 32 benchmarks, ETFs, and bellwethers above, the median price return for the week was over +8.3%. Meanwhile, the median price return for this same mix on a YTD basis is only around +4.2% with a positive vs. negative score of 18-14.

The Hi-Lo return differential between #1 Intel and #32 Intuit is a lofty 126 price return points. If we throw out the Hi-Lo names, we see Micron at #2 vs. ServiceNow at #31 with a return differential of over 96 points YTD. We look at the broader time horizon mix in a separate asset return piece.

The 1-month returns in the 32 benchmarks and ETFs show 3 of the 4 major benchmarks in the top quartile with the small cap Russell 2000 at #4 just ahead of the NASDAQ at #5 and Midcaps at #6 with the S&P 500 in the upper end of the second quartile.

We see Transport ETF (XTN) getting a big boost this past week (see the 1-week numbers) as relief on jet fuel and fare pressure supported a rally for airlines. Meanwhile, less cyclical fears and relief on diesel help boost freight and logistic operators. The “AI panic” on business models has also eased a bit for data-centric freight brokerage operators.

The Tech ETF (XLK) at #3 is just behind Regional Banks (KRE) at #2. The Financials ETF (XLF) is just across the line the top of the 2^nd quartile.

Overall, that is a cyclically diverse mix in the top quartile. We even see the BDC ETF (BIZD) mounting a small comeback for this period with Homebuilders (XHB) climbing back after sitting in last place for 3 months.

In terms of bond ETFs, we see 6 of 7 in positive range. The long duration UST ETF (TLT) fell just below zero at -0.04%.

The 1-month “Tech Check” shows the divergence between semiconductors and software and the pain inflicted on the SaaS-centric services operators. The bottom 3 names include ServiceNow (NOW), Intuit (INTU), and Salesforce (CRM). Adobe (ADBE) has been another software name taking a beating along with Palantir (PLTR) as one of the bigger holdings in recent periods in the IGV ETF.

The gap between the Semiconductor ETF (SOXX) at +22.2% in the top quartile and the Software ETF (IGV) at -0.5% in the bottom quartile sizes up the recent trends. Some of the SaaS names have been swinging around in dramatic fashion such as Zillow (Z) and FactSet (FDS). Those two names were in positive range for the month but still deeply negative YTD as we cover in the next chart.

The YTD return profile for the Tech Check list of 32 is grim in broader market context at 18-14. If we exclude the 4 broad market benchmarks (S&P 500, NASDAQ, Midcap 400, Russell 2000) the score is14-14 in a market where the NASDAQ and S&P 500 have hit records.

The depth of the negative returns on the right side of the chart makes a statement with the bottom quartile running from -19.5% for the Software ETF (IGV) down to -40.6% for Intuit (INTU) in last place. The YTD price returns post a Hi-Lo range of 126 points. The AI panic around the sustainability of SaaS business models has been addressed constantly in recent weeks and the numbers are ugly YTD.

We see some old school legacy names on top with Intel (INTC) at #1 at over 85% followed by Micron (MU) at +59.4%, capex sensitive Applied Materials (AMAT) at +54.5%, and the Semiconductor ETF (SOXX) at #4 with 38.0%. As noted earlier, the return on SOXX blows away the Software ETF (IGV).

The score for 3 months for the 32 benchmarks and ETFs weighed in at 26-6. We see 3 energy ETFs in the top quartile with E&P (XOP), diversified Energy (XLE), and Midstream (AMLP). The Utilities ETF (XLU) is also in the top 5 with the chemicals-heavy and cyclically exposed Materials ETF (XLB). The Tech ETF (XLK) is the only tech-centric asset line in the top quartile, and we also see EM Equities (VWO) with the interest rate sensitive Real Estate ETF (XLRE).

As we discussed in the weekly and 1-month charts, we see Transports (XTN) rallying back impressively on what seemed to be a reasonable solution to the Strait of Hormuz problem before it immediately blew up.

Trump overplayed his hand by not easing the Iran blockade if his goal was to declare victory and avoid committing thousands of troops. If Iran was the GOP senate, he would be fine since they would all fold. Trump’s ignorance of Iran and the culture now put him in a very challenging situation that makes it harder for his ego risk. This in turn provides worse risk symmetry in the next steps.

The 6 negative returns in the mix are a diverse lot with Homebuilders (XHB) about more than mortgage rates as the outlook for housing has dimmed with consumer confidence tanking and fears of payroll setbacks and weaker real wage growth. The higher mortgage rates initially seen after Iran were joined by other headwinds for housing.

The trailing 1-year mix of returns is still riding a good 2025 with a mixed 2026 by sector. The 31-1 score just shows the BDC ETF (BIZD) at a modest negative. All the bond ETFs are positive with the 2025 UST shifts a bigger factor (Total Return Quilt Across Asset Classes 2008-2025 1-2-26). As noted earlier in the piece, the yield curve story in 2026 has been a tough one and remains highly uncertain around inflation and oil.

Existing Home Sales March 2026: New Beginnings or New Ends? 4-15-26

Producer Price Index March 2026: Heater or Curve Ball? 4-14-26

Market Commentary: Asset Returns 4-12-26

CPI March 2026: The CPI Cycle Could Prove Maddening 4-12-26

4Q25 GDP: More Adverse Revisions in the Golden Year 4-9-26

JOLTS Feb 2026: Openings Down, Hires Down, Layoffs Up 3-31-26

Market Commentary: Asset Returns 3-30-26

Market Commentary: Asset Returns 3-23-26

Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

Housing Starts Jan 2026: Total Starts Up, Completions Up, Permits Down 3-12-26

The US as an Aspiring Emerging Market: Fiscal SNAFU, Political FUBAR 4-6-26

Market Commentary: Asset Returns 4-12-26

Glenn Reynolds, CFA — Sun, 12 Apr 2026 20:29:47 GMT

It is only a small naval blockade…

The world just got a lot crazier with the failure of the Islamabad negotiations as Trump threatened a naval blockade of all traffic. That might not last the day once someone explains to him that is a de facto declaration of economic war on China, who can retaliate on a small scale (strategic metals, etc.) or large scale (Taiwan). Absolute control over the Taiwan economy would make the US captive overnight in semiconductors and electronics (see US-Taiwan Trade: Risks Behind the Curtain 2-1-26).
The latest round of asset return updates includes bullish views on the US-Iran war ceasefire working out, in turn leading oil to plunge with the Strait of Hormuz settled. If that was the case, the probabilities of supplier chain disruptions would be easier to handicap. The weekend just changed all that with Islamabad failing and now Trump threatening the counterintuitive action of reducing supply disruptions by dramatically increasing supply disruption.
In the meantime, trade issues are back in the headline with Trump threatening fertilizer producers on price gouging after his actions already sent fertilizer supplies into Gulf-based dislocations. The upcoming USMCA review includes Canada as one of the largest suppliers of fertilizer.
Under “bad allies for a thousand, Alex,” the active campaigning actions of Trump and Vance in favor of Orban might have flowed into US-EU relations (including trade) if Jan 6 style issues unfolded. However, as we go to print, we see that Orban has conceded defeat. Trump’s active support of Orban and the AfD in Germany already signal the authoritarian and pro-Russian flavor of Trump’s support. It seems more obvious across time that Trump desires to see the EU break up. Orban does not go into Trump’s win column.
The UST curve handicapping could go back into paroxysms following the Islamabad failure and the new threat of a full naval blockade. The world can hope for a TACO move there but it is uncertain. Behavioral odds-making is a very inexact science.
This week starts the financial sector earnings wave, and we will also get the PPI release on the heels of the commodity and materials cost pressures of March. Existing home sales will signal how the mortgage rate pressures of March weighed on volumes, and we get a fresh read on Industrial Production.

Even after a banner week in equities and some easing of UST curve pressures on bonds as detailed below, the trailing 1-month returns are a mixed bag with 3 of 4 bond benchmarks posting negative returns. Only US HY posted positive returns with a minimal +0.33%.

Equities have had tech challenges on multiple fronts with the fixation on AI threats to software worsened by the UST and inflation anxiety as discussed in commentaries along the way and broken out in the “Tech Check” charts further below. Looking back 3 months, we see NASDAQ and Russell 3000 Growth in the negative return range. The S&P 500 and the Dow were both in the red for 3 months.

Small caps have been the big winner looking back over 1 year and beat the NASDAQ and S&P 500. Small caps and Value stocks were the leaders over 6 months as the sector-rotation themes were playing out for value vs. growth and tech.

The rolling return visual

The 1-week and 1-month symmetry flipped back to positive with the ceasefire and hopes for a deal. That initial attempt at a deal just failed this weekend with the handicapping game a fresh new challenge for the markets. The 3-month symmetry is slightly positive at 19-13 while the 1 year timeline is still riding the rally at 31-1 with only the BDC ETF (BIZD) in the red.

The Magnificent 7 heavy ETFs…

The tech bellwethers were mixed for the week but with some key names having a very strong week as detailed further below in the “Tech Check” breakouts. The temporary relief on the US-Iran ceasefire will give way to turmoil in the markets later tonight and tomorrow as the global markets cast their votes not only on the failure to strike a deal in Islamabad but also on the threat of a full naval blockade that will make the supply shock that much worse.

For the week, software was again in the tank with the Software ETF (IGV) in last place at -7.06% for 1 week, -28.9% over 3 months, and -33.4% over 6 months. In contrast, the Semiconductor ETF (SOXX) was +13.8% for the week and +42.4% for 6 months. The stock picking challenge in the tech sector across 4Q25 and into 2026 is a major differentiator.

The setbacks since Friday have a very wide range of potential outcomes. If they can’t get back on track, the regions that will see the worst damage will be Asia and the EU given the consumption of Gulf product flows. Some US players can ride the global supply stress and pricing/cost impacts to their benefit as we have already seen (energy, petrochemicals, aluminum, fertilizer). Notable rallies were seen with Valero, CF Industries, Lyondell, and Alcoa.

The very detailed commentaries hitting the headlines in recent weeks around supplier chains (helium, fertilizer, aluminum, etc.) even beyond the oil-to-refined-products chain will get revisited on the customer fallout.

We assume someone will explain (very slowly) to Trump that a naval blockade will be worse by an order of magnitude than the current extortion by Iran. No supplies vs overpriced supplies could bring more production chains to a halt rather than just inflate the expenses in some cases.

The UST forecasts and inflation anxiety will go into a fresh round of handicapping while the FOMC will have an even worse set of circumstances to ponder later this month if we see any combination of boots on the ground or a full naval blockade. The full blockade plan and going after those that pay the fee to pass will be quickly adjusted since it is so self-destructive and damaging to global economies. It appears unworkable (boarding parties? Then what?). The explanation might have to come from a non-cabinet billionaire. The White House sycophants might not dare.

The commentary below is mostly a cut-and-paste from an earlier post on LinkedIn on Saturday with some additional input:

The chart updates the weekly total returns on the 32 benchmarks and ETFs we track. The Iran War has dulled the senses a bit through Friday with the end game getting worked on in Islamabad. With the complexity of the Israel-Lebanon War and its overlap with the US-Israel tag team on Iran, sorting out the pieces is no small challenge. As we know now, the Islamabad deal failed.

The complications are exacerbated by the fact that Team Trump and Iran have starkly different versions of what was agreed to the first time. The market last week was betting on a solution with a very strong week in equities.

With headlines flagging the “best week of the year in equities,” the NASDAQ came roaring back with all 4 major benchmarks (including Russell 2000, Midcaps and S&P 500) posting solid rallies. The market saw 10 of 11 S&P 500 sectors positive with only Energy negative. We saw 5% handles on the week for Communications Services and Tech in the S&P 500 sector mix with 4% handles on Real Estate, Industrials, and Consumer Discretionary. The Russell 2000 and Midcaps are still beating the large caps YTD.

Last week’s equity market performance was a bounce with breadth in a week when Trump started off with profane Easter rantings as he had threatened to annihilate a civilization and discussed moving on to the “next conquest.” The week saw Trump state that a “whole civilization will die tonight” if conditions were not met.

Such language – along with the hyped “Donroe Doctrine”– is not exactly a deterrent to China (Taiwan) or Russia (Ukraine, Baltics). In fact, it encourages a global carve-up. The potential domino effects of continuing down this path could pull in aggressive responses from China while Russia cashes in.

The scoresheet above is clear enough on what a solid performance the week saw in equities with a positive to negative score of 26-6. The 6 in negative return range include the 3 energy ETFs across the E&P ETF (XOP), the diversified Energy ETF (XLE), and Midstream ETF (AMLP). Those 3 are joined in the red by the BDC ETF (BIZD), the Equal Weight NASDAQ 100 (QQEW), and the long duration UST ETF (TLT) with a very slight negative.

The winners for the week cut across cyclically diverse subsectors including Transports (XTN), Homebuilders (XHB), EM Equities (VWO), Tech (XLK), Industrials (XLI), Regional Banks (KRE), and Consumer Discretionary (XLY). That breadth of rallies in the top quartile underscores how wide the damage from the Iran War was expected to be from inflation to FOMC policy to the consumer sector and the broader macro cycle. This coming week could see a quick reversal if damage control does not start right away.

Mortgage rates have declined from recent highs, and the FOMC easing odds have risen again off the recent plunge. The risk of tightening shifted lower as we covered in our separate CPI commentary (see CPI March 2026: The CPI Cycle Could Prove Maddening 4-12-26 ). Asset quality concerns remain a factor (private credit, pressure on consumer metrics). Those odds will once again get jumbled and gyrate again this week with the latest news.

The commentary below is mostly a cut-and-paste from an earlier post on LinkedIn on Saturday with some additional inputs:

The above chart frames price returns for the 32 benchmarks and tech-centric ETFs we track each week. At a 20-12 positive vs. negative score, there are more winners and losers on the week, but we see some very big moves for the winners in the top tier and material weakness for those among the bottom tier performers. The Hi-Lo range of returns was over 42 return points. That includes +23.8% for INTC at #1 and -18.6% for NOW at #32.

We see a big rally in the semiconductor-related names with two Mag 7 names in the top quartile (AMZN, META) and 2 Mag 7 names in the upper end of the 2nd quartile (Alphabet, NVIDIA). The Semiconductor ETF (SOXX) made the top 5. We see AAPL, MSFT and TSLA in the third quartile with MSFT and TSLA in the red. The Mag 7 score was 5-2 while the “Mag 7+3” was 7 positive and 3 negatives. Broadcom was a strong #2 at +18.1% behind Intel at #1 and Micron at #3 with a +14.8% return.

The SaaS-centric services names took a fresh beating this week with ServiceNow (NOW) sitting on the bottom at -18.6%. Joining NOW in double-digit negative range again is Intuit (INTU), Palantir (PLTR), and Salesforce (CRM). FactSet (FDS) in the bottom quartile and Zillow (Z) were again in the red. The software names again underperformed with the Software ETF (IGV) and Adobe (ADBE) in negative return range in the bottom quartile.

From discount rates in “long duration” tech equity valuation to cyclical and consumer sector worries, the Iran War risks directly impact the tech sector. The AI panic around software and related private credit noise was bad enough without the Iran War scenario spinning.

The 1-month score for the 32 benchmarks and ETFs was 20-12 as of Friday close. We see 5 of the 7 bond ETFs in negative zone on the UST curve spillover with HY bonds (HYG) and EM Sovereigns (EMB) slightly positive. The long duration 20+ UST ETF (TLT) is in negative range in the bottom quartile joined by the UST ETF (GOVT).

The top quartile was cyclically diverse but shows no tech. The top quartile included energy (XOP, XLE) but Transports (XTN) came out on top despite the airline damage from fuel. Regional Banks (KRE), the chemicals-heavy Materials ETF (XLB), and small caps (RUT) and Midcaps (MDY) were in the top tier.

The Tech Check group was a tie at 16 positive and 16 negative returns. We see a good story for semiconductors and ugliness for software and SaaS-based services operators. We have covered the tech noise and subsector setbacks in prior weekly comments and in the weekly returns above. The fear of AI giants causing “business model extinction” for SaaS-centric services operators has been impossible to fully offset so far.

For the 1-month period, we see a Hi-Lo range over 62 points in the returns of #1 Intel (INTC) at 33.4% vs. #32 ServiceNow (NOW) at -28.8%. In the bottom quartile as noted, only Zillow avoided double-digit negative returns at -9.5%.

We see 4 of the Mag 7 in the red for the month with Amazon alone of the 7 in the top quartile with Alphabet and NVIDIA in the 2^nd quartile.

The top quartile for the month was heavy on semis with Intel (INTC) at #1out in front followed by Advanced Micro (AMD) at #2, capex-sensitive Applied Materials at #3, and the Semiconductor ETF (SOXX) at #4. In contrast, the Software ETF (IGV) was down in the bottom quartile at -12.8%. Software has taken a beating from AI fears and private credit panic headlines.

The YTD “Tech Check” score posted 13-19 positive vs. negative but with some dazzling winners (Intel, Applied Materials, Micron) and beastly losers (Intuit, ServiceNow, Zillow, Salesforce, Adobe).

The main theme is “semis vs. software” with semis winning and a range of software and SaaS-based names taking a beating. The Semiconductor ETF (SOXX) posted +28.4% and ranked #4 while the Software ETF (IGV) posted a grim -29.4%. We see 13 lines well into double-digit negative returns with the 13^th worst (IBM) posting -22.1%.

The above chart shifts back to our usual group of 32 benchmarks and ETFs for 3 months. The score of 19-13 shows no tech name in the top quartile with its 3 energy related ETFs (XOP, XLE, AMLP) joined by Utilities (XLU) and Materials (XLB) in the top 5. Real Estate (XLRE), Industrials (XLI) and Consumer Staples (XLP) round out the top quartile. That mix highlights the rotation trade that was unfolding in 2026 and some of the related fears that gripped software and SaaS services.

Sitting in the bottom tier we see the Equal Weight NASDAQ 100 (QQEW) in dead last with the BDC ETF (BIZD) one off the bottom. Financials (XLF) have been taking heat on the private credit noise and the concerns around the FOMC easing probabilities.

Homebuilders (XHB) felt a combination of cyclical pressure in housing but also the mortgage rate creep that came with the Iran War scenarios. Obviously that UST curve and steepening/shifting risk will come back into the dialogue with the ceasefire setbacks and Trump’s threats of a naval blockade. He already seems to be backpedaling as media flows, but that has to play out.

The 31-1 score looking back a year posts a median line-item return of over 24%. That median and range still makes for a very good rolling 1 year despite the weak start to 2026. The BDC ETF (BIZD) is down to -3.7% with 6 of the 7 bond ETFs sitting in the bottom quartile and only EM Sovereigns among bonds breaking into the 3^rd quartile.

We see energy at #1 (XOP) and #3 (XLE) with Transports (XTN) at #2 and the Tech ETF (XLK) and Russell 2000 rounding out the top 5. It took 40.6% to make the top quartile, so that is a banner LTM run rate for equities.

4Q25 GDP: More Adverse Revisions in the Golden Year 4-9-26

JOLTS Feb 2026: Openings Down, Hires Down, Layoffs Up 3-31-26

Market Commentary: Asset Returns 3-30-26

Market Commentary: Asset Returns 3-23-26

Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26

Producer Price Index Feb 2026: Getting Warmer 3-18-26

Industrial Production Feb 2026: Capacity Utilization 3-16-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

Housing Starts Jan 2026: Total Starts Up, Completions Up, Permits Down 3-12-26

The US as an Aspiring Emerging Market: Fiscal SNAFU, Political FUBAR

Glenn Reynolds, CFA — Mon, 06 Apr 2026 18:28:12 GMT

Raise your hand if you are in favor of banning mail-in voting, weaponizing the Postal Service, and allowing the White House and DOJ to control state voter rolls.

With the SAVE Act faltering, Trump issued an Executive Order (“Ensuring Citizenship Verification and Integrity In Federal Elections”) that seeks to Federalize elections and to cede control of state voter rolls to Washington under the DOJ and executive branch. As evident in his recent challenge to birthright citizenship, Trump believes he has powers to ignore Congress and take action on anything he desires even if the constitution and/or legislation does not allow it (e.g., IEEPA, unilateral action on birthright citizenship, etc.). There is no constitutional line Trump will not cross.
After the rough trip to SCOTUS on the birthright citizenship debate, Trump now wants control of state voting rolls in what is an aggressive push to salvage midterms for the GOP and continue to feed his own story line that he did not get his ass royally kicked in 2020 by 7 million votes. This latest gambit once again crashes into clearly written constitutional rules.
The Executive Order comes with DOJ threats of criminal actions against state officials and enlists the postal service as well. Trump must be worried (he should be) that his plunging ratings to record lows will hit the GOP hard in midterms. Tariffs and now the Iran War have inflicted economic damage on both a global scale and at the national level and set the stage for pain in household budgets.
Trump’s less-than-dazzling performance on Iran includes his tragically incoherent, ill-advised, inconsistent, and self-contradictory statements this past week on what the goals were at the outset of the Iran War and what comes next. The economic fallout is unfolding into what could be a global disaster if escalation goes in the direction of “take the oil” or puts many boots on the ground. His grab of network time last week brought an internally inconsistent replay and offered nothing new. Trump is back to a countdown to blowing up all the power plants (a clear war crime).
The latest Executive Order on elections is the next step in his ambitions. Most people who read or are not “in denial of history” know the legacy of voter suppression – and literally disenfranchisement. Disenfranchisement and voter suppression are a matter of fact in the history books (see Martin Luther King Jr.—MLK was a Fact, Not a Theory 1-15-24). MLK was assassinated only 58 years ago this weekend (April 4, 1968), so it was a strange week to launch the order. It is not as if the baby boomers were not ringside and fully aware of the violent reaction to the 1965 Voting Rights Act. Trump’s Executive Order would be a stark setback.
We add a few links below as memory joggers on some ugly history some would deny and seek to erase. The fact that there is a lack of historical perspective on real events in the White House should not be a surprise since factual history is viewed as poison. These days, it is all about packaging themes and not the historical reality.

Trump should be quizzed by the press on the Elections Clause (Article I, Section 4, Clause 1). No way he read it. Or no way he cares.

Trump “going postal” and bringing DOJ threats…

Anyone can consult with the Constitution on who makes the call on state level voting rights. The “Elections Clause” is there for the reading. The Executive Order signed by Trump this past week will fail, but may have backstop plans to declare emergencies and try out a range of contingency plans to maintain power. Such a view is not far-fetched speculation since it is evidence-based (Jan 6, etc.). His motives could not be more transparent.

Trump’s order enlists the DOJ (now run by his personal attorney) and the Postal Service as he adds a new angle on “going postal.” If you read the executive order, it is easy to see the massive logistical maze that he is calling for and the extreme manpower demands and tech support to even execute something like what the order proposes.

The goal is to control voting rolls, but the intent of the plan design seems to be to assure failure. That would in turn justify other “emergency actions” by Trump. Remember back in 2020 when Trump’s appointee (a rich white male executive) was ordering high speed mail processing machines removed? This mail-in process is much worse as designed by Team Trump. It will be enforced and supervised by his executive branch loyalists.

Away from the illegitimacy and illegality of the executive order, the design of the proposal shows the darker side of intent. The US Postal Service lost $9 billion in FY 2025 and cannot even handle the burden it has now. Trump’s ability to influence the USPS can be debated, but the stakes are high.

This proposed voting process structure might offer a chance to Trump et al. to intercede on an emergency basis in 2026 and would also allow him to direct that disruptions of election operations be aimed toward key swing states and blue cities with high vote counts. What he proposes appears set up to fail and could allow for additional emergency action to throw out election results. It would also allow partisan state legislatures the opportunity to step in with some false grounds he devises. Refusal to certify elections could be a partisan maneuver in a way it was not (even if close) in 2020.

White House control of state voting rolls…

The immediate motive is to control elections at the White House and executive branch level. The main thrust is to have a subservient DOJ (provisionally run by his former personal lawyer) to mitigate Trump’s fear of power erosion. The legal risks to Team Trump of a Democratic led house include Epstein investigations and corruption hearings whether self-dealing conflicts of interest or family deals. That would get aired in detail.

It is also about Trump looking for more support for his “Big Lie” that he won the 2020 election (in a “landslide” for Trump) even though there is zero evidence produced despite the years that have passed. Trump still wants to obscure that he is 0 for 3 in winning 50% or more of the popular vote. The same is true for Trump losing the popular vote in 2 out of 3 elections.

The White House will try to understate the significance of his proposed mail-in actions, but it is an enormously threatening move. As a frame of reference, voting tallies in the 2024 election (won by Trump) indicates 1 in 3 voted by mail for an estimated 48 million. That includes 40% of that group comprised of voters 65+ years in age. The balance across “geographic settings” showed 1 in 3 urban, 1 in 3 suburban, and 1 in 4 rural voters. Of the 48 million, white voters were around 27 million. The stats include 1 in 4 Democrats and 1 in 4 GOP with 5 states showing 1 in 3 GOP. That is a lot of votes.

The desire to squeeze swing state turnout and especially in major urban areas is not a mystery if you give it a little thought. The election turns on Pennsylvania, Michigan, Wisconsin, Georgia, and Arizona. Trump also wants to mitigate risks in Nevada and Ohio (Obama carried in 2012 but GOP since).

Lack of evidence never gets in the way of a Trump story line…

We include some notable reading materials on immigration and voting below. The facts torpedo the false premises of Trump’s immigration themes and are worth a glance. The barriers to facts include disinformation waves and mental laziness exploited by Team Trump. Even the Heritage Foundation and CATO (the antithesis of left wing) have furnished studies and data that show how Trump’s claims on “illegals” voting are BS.

Trump is more of an adjective-heavy and “you lie, and I’ll swear to it” type. Trump has produced no factual support for his 2020 fraud claims – ever. He is a fact free, numbers free, declarative sentence and adjective-heavy kind of guy.

Evidence is not there, but it seldom matters in the power grab…

Trump’s Claims About Noncitizens Voting Are False. We Can Prove It. (CATO Institute)
Debunking Lies About Voting and Citizenship (Brennan Center for Justice)
How widespread is election fraud in the United States? Not very (Brookings)
Analysis: Heritage Foundation’s Database Undermines Claims of Recent Voter Fraud (Brennan)

As noted, we would highlight that the Heritage Foundation (the Project 2025 crowd) and CATO (Libertarian) are on the right wing and conservative side of the political spectrum on issues. Heritage is in a different zip code. Like Trump’s delusions around the 7 million votes in 2020, it is very hard for studies to find evidence of what is not there. Trump can just spout it without evidence and the red hat bobbleheads just fall into line.

Of the 47 Presidents, only two of them made this false claim of “rigged” election and massive, outcome-changing voter fraud, and they are both Trump (#45 and #47). Andrew Jackson had some gripes in 1824, so he gets a portrait on Trump’s Wall. Al Gore had the hanging chad controversy in 2000, but he was a classier and more patriotic guy than Trump. Of course, Gore would not complain at all if he had lost by 7 million votes. Trump’s behavior and recent executive order on voting is a sign of how far America has fallen as it starts to imitate an emerging market.

Jaded history of voter suppression…

While the historical revisionists who have been charged with rewriting history at the Smithsonian (JD Vance and his beauty queen legal eagle sidekick), the reality is that voter suppression has been a “great” American tradition.

The goal of undermining groups of Americans is usually about those that are on the “other side” politically or viewed in a racial or ethnophobic light. The word “disenfranchised” was a literal term for decades in the US. The history typically applied to blacks in the South, but it is now broader with a target on the back of immigrants broadly and those from Latin America and the Caribbean more narrowly.

The voter suppression topic is about historical facts vs. fiction and the need to cover up investigations of bad behavior (and worse intent) that we see today in many areas (e.g. Epstein). It literally takes a few minutes to google and confirm the voter suppression history even during the baby boomer years ahead of the Voting Rights Act. If we go deeper into Jim Crow history, it is of course much worse.

We include an excerpt below from an earlier note we published (see Martin Luther King Jr.—MLK was a Fact, Not a Theory 1-15-24). The history – denied or ignored by Team Trump – offers a reminder of why voting hurdles are such a sensitive topic. That is especially the case when the barriers being created are to deter a problem that has not been proven to even exist outside of Trump’s rambling blather and blind embrace by MAGA followers.

The history of voting rights ugly but Trump will not even admit it ever existed…

“A notable example of disenfranchisement… was Louisiana. Black voter registration fell from 95.6% before 1896 disenfranchisement laws were passed to 9.5% right after that and then down to 1.1% (not a typo) in 1904. Alabama voter registration fell from 180,000 in 1900 to 3,000 in 1903. Florida election law changes in 1888 saw black voter turnout fall from 62% to 11% in 1892 and to 5% by 1896. Black voter turnout in Mississippi was 29% in 1888, 2% in 1892, and 0% in 1895. You get the idea. There are a lot of examples.”

The above history is old, but it is a reminder that victories can soon give way to takebacks. That is the case with Trump’s latest actions. “Old news” does not change the history, and admitting it is a start for the voter rollback advocates to be taken seriously. Otherwise, it is just the same old racism and xenophobia and closet fascist impulses to suppress voting that extended into the early 1960s.

Those of us watching the voter suppression from afar on TV in the 1960s and reading the news in our younger years (Johnson Administration) underscore that it was not really that long ago with Year 250 for the nation teed up in 2026. This latest executive order from Trump would be a dismal way to celebrate the Declaration of Independence and the founding of the nation.

A few samples on suppression histories:

Mississippi as the champion of disenfranchisement and suppression: “Although Mississippi had the highest Black population of any state in the 1960s, only 6.7% of eligible Black voters were registered to vote by 1964.” The history of these states has made for a lot of movies. If you want to skip reading, check out Netflix or Prime. Mississippi Burning is a great one. So is the movie Selma for Alabama. The narrow topic of registration numbers (whether % of the black voters or the voter counts by number) are objective facts. The motive behind voting rules are more subjective these days (even if obvious to most rational thinkers).
Alabama is also on the All-America Team in disenfranchisement and voter suppression. The black voter registration numbers were ugly as JFK was on his way to the White House. Words like “Selma” and “Bloody Sunday” (1965) and racist cult heroes such as Bull Connor do not need much introduction. It is understandable that there would be sensitivities on voting rights as a topic in the ranks of baby boomers who witnessed it (live or on TV) or for anyone who can read a book (a group in apparent decline by choice). The movie Selma works for those bored by voter registration stats and blind acceptance of “voter ID” disinformation. The very real factual history underscores why many might challenge Trump’s desire to rewrite the Election Clause after he could not get Congress to pass suppression legislation (the election clause requires Congress to overrule states).
“In 1964, just prior to passage of the VRA, only Mississippi had a smaller percentage of eligible African Americans registered to vote than Alabama, 6.7 percent compared to 23.0 percent, though some sources say Alabama had less than that.”
Georgia looms larger than Alabama or Mississippi in the Senate and Presidential elections since GA is a critical swing state. GA leaders saw Trump pressure them to “fix” the election outcome after he lost that state. The GOP Governor and State Secretary told Trump to pound sand on his false claims. Such courage (integrity?) is scarce these days. GA is also in the top tier of suppression history. Senator Warnock has been taking heat (hate?) for his opposition to the SAVE Act. History is on Warnock’s side in Georgia. As a frame of reference, GA ranks #2 in the Tuskegee historical rankings for number of blacks lynched. Mississippi is #1, Texas #3, Louisiana #4, and Florida #5. Those don’t tie into voting rights, but they do tie into the concept of intimidation, violence and bad outcomes when people with hoods (or masks) hang out around the voting polls (about those ICE masks…).

The voting rights debate is intrinsically colored by racism and xenophobia …

The hard right political groups in the US, whether MAGA or old school Christian Nationalist racists, will deny the realities of the 3-state sample above (states like Louisiana and Texas are often overlooked in this peer group). The racists or historical revisionists will attack the whole concept of voter suppression in recent history, but at least the White House should admit the above histories are facts. They do not. That colors their current motives. After all, Trump had stated the Civil War could have been “negotiated” (he is not an avid reader of history).

There is plenty of history on voting rights struggles and bad stories across the decades with voting rights at the center of the issues and also as the trigger for Klan activity. Florida is a state that gets overshadowed by its noisier more troubled neighbors, but check out the movie Rosewood for some horrors of the past in Trump’s home state.

These are the types of histories that Trump and MAGA deny and will get erased by design. When it comes to voter actions from Trump, assume bad intent. It is not hard to find it if you look. His goal is to lower turnout and create room for challenges by his Federal and DOJ team with his personal lawyer now holding the top job at the DOJ.

You can’t blame a guy for trying? Yes, you can.

Trump using an Executive Order to take over state voting to suppress votes will violate the clear letter of the Constitution and the Elections Clause. That was the case in birthright citizenship also. The fact that they will push ahead on that path anyway speaks to the people involved and how the court was stacked.

Team Trump can ask “What have we to lose?” with such efforts. The country and its voters of course ask that same question. They have much to lose just like a few countries did in Europe in the 1920s and 1930s.

For many voters, running the gauntlet of ICE threats at the polling places has some parallels. The image of ICE as overpaid, underqualified, undertrained, masked thugs on high protein diets is not without merit. They freely beat up eligible voters and US citizens with immunity and get a blank check from above (it is on video but skate from accountability). So, what would regulate their behavior at the polls when it is risk free?

For voters, an ICE presence is not an incentive to get to the polling place. That is why Team Trump also wants to take away the mail option. Reduce the avenues available.

The bottom line is “ICE + voter intimidation + banning mail voting = lower turnout.” It is not complicated.

Some executive order excerpts…

The Executive Order seeks to institutionalize the control of state elections at the Federal level. We try to picture the DOJ and Trump taking arbitrary actions in swing states. It was not lost on Trump that his massive loss in 2020 was tied in part to the highest turnout rate since women got the right to vote. That turnout was still below many nations, so it is not impressive.

In other words, the voter turnout could rise quite a bit for a midterm if the Independents turn out and Democrats get off their couch. That outcome would be a major threat to Trump and his MAGA movement.

The 4 years of Trump 1.0 were enough for many to turn out after big wins in 2018 midterms. 4 years of Biden dimmed the enthusiasm in 2024. That expectation for a high turnout is likely to be back in the 2026 midterms, and Trump is panicking. Trump has to beat back that wave. It is that simple.

The legal challenges are already coming. The fact that Trump would go the route of issuing an executive order as his own personal Constitutional Amendment speaks volumes of his threat to Democracy and what might unfold. At some point, more global investors will question the role of the UST as the “risk-free asset.” Escalation on the level implied by his recent threats against Iran would take the US into a tier of crisis not seen since 1860.

Just a sampler of how votes can be challenged and derailed by the White House…

The bottom line is if Trump cannot ban voting by mail outright, his goal is to create as many administrative and institutional barriers as possible to deter people signing up. Then states can ban the voting by mail or face the challenge of hurdling the massive barriers that Trump seeks to build up. To the extent those mail-ins happen, Trump has failsafes in that the process is under his team’s supervision to sound the alarm. Trump can channel their actions toward key states and cities and suspend the election outcomes. Trump’s executive order piles on with more barriers led by appointees that he controls. It is the proverbial stacked deck.

Some excerpts from the executive order:

Team Trump dictates the plan to the states…(elections clause?)

Below we cut and paste some language from the executive order. It reeks of suppression via intentional burdensome institutional hurdles and tasks doomed to fail.

“The Secretary of Homeland Security, the Commissioner of SSA, and the Postmaster General shall coordinate with the Secretary of Commerce in effectuating all relevant aspects of the implementation of this order.”
“The Attorney General shall enforce compliance with the applicable Federal statutes referenced herein and provide guidance to election officials, including any instrumentalities thereof; contractors; individuals involved in the administration of Federal elections; or public or private entities engaged in the printing, production, shipment, or distribution of ballots.”
“The Secretary of Homeland Security shall, within 90 days of the date of this order, establish the infrastructure necessary to compile, maintain, and transmit the State Citizenship List described in section 2(a) of this order, and shall designate a point of contact within DHS to receive and process requests from individuals and State election officials regarding the relevant State Citizenship List. The Commissioner of SSA shall provide all necessary citizenship and identity data to the Secretary of Homeland Security in support of this requirement, consistent with applicable law, the Privacy Act, and all applicable use agreements.”

Our translation: Trump’s team rules the oversight of the process in case he needs to challenge later. The Feds will be de facto overseers of state election compliance. These sections alone underscore the nature of the people pulling the levers. This is a proverbial collection of lapdogs and includes some that are not exactly the brightest bulbs on the shelf. The sole virtue for Team Trump is unquestioned blind loyalty. That is what authoritarians need.

The weaponization of the post office or the excuse for the process failing?

For a sign of how convoluted this process is, we include a subset of the requirements below for state officials and the post office. The chain of mandated activity implies flawless execution by state and city officials, prudent and diligent focus by the voters to jump through all the hoops, and a post office system that will be locked in and very efficient. Those are impossible odds, and Team Trump knows it.

The bottom line is that your vote depends on civil servants, bureaucrats, and postal workers executing in record time with the validation of the votes still subject to White House appointees not throwing a penalty flag and staging a big excuse to challenge the outcomes.

In other words, once the turnout has been beaten down, Team Trump still gets a bite at the apple to challenge the outcome.

The civil service employees and administrative “cluster of circles” begs poor execution and failure subject to challenge as detailed earlier. We saw no reference to budgets and staffing support or a longer potential phase in period. They want to head off the 2026 elections now. One can suspect the swing states and blue cities would see their results challenged if SCOTUS lets this executive order fly. There is a target on their backs.

Some demands on the USPS (postal service):

Proposed provisions specifying that the USPS shall provide each State with a list of individuals (Mail-In and Absentee Participation List) who are enrolled with the USPS, pursuant to a process specified in the rulemaking directed by this subsection, for mail-in or absentee ballots provided by such State, along with unique ballot envelope identifiers, such as bar codes, for mail-in or absentee ballots provided to such individuals.

Proposed procedures enabling each State to routinely supplement and provide suggested modifications or amendments to the State’s Mail-In and Absentee Participation List in advance of any Federal election, consistent with applicable State law.
Proposed provisions specifying that all outbound ballot mail must be mailed in an envelope that:
(A) is marked as Official Election Mail, including through designated markings provided by USPS for this purpose, such as the Official Election Mail logo, as necessary and appropriate;
(B) is automation-compatible and bears a unique Intelligent Mail barcode, or successor USPS technology, that facilitates tracking and is consistent with the other requirements of this section; and
(C) has undergone a mail envelope design review by the USPS to ensure compliance with USPS mailing standards, including barcode placement.
(Proposed provisions specifying that, no fewer than 90 days prior to a Federal election, any State may choose to notify the USPS if it intends to allow for mail-in or absentee ballots to be transmitted by the USPS. As part of that notification, any notifying State should further indicate whether it intends to submit to the USPS, no fewer than 60 days before the election, a list of voters eligible to vote in a Federal election in such State to whom the State intends to provide a mail-in or absentee ballot to be transmitted via the USPS.

Our view: This is the hook where they ban mail-in voting in substance by using process obstacles and onerous admin demands even if not by outright policy that bans mail-in voting.

Proposed provisions specifying that the USPS shall not transmit mail-in or absentee ballots from any individual unless those individuals have been enrolled on a State-specific list…
Proposed provisions specifying that the USPS shall provide each State with a list of individuals (Mail-In and Absentee Participation List) who are enrolled with the USPS, pursuant to a process specified in the rulemaking directed by this subsection, for mail-in or absentee ballots provided by such State, along with unique ballot envelope identifiers, such as bar codes, for mail-in or absentee ballots provided to such individuals…

That authoritarian checklist needs voter suppression to succeed…

The usual playbook for authoritarians is not a big mystery. Two leading historians in this area who have published easy-to-read books include Ruth Ben-Ghiat (Strongmen) and Timothy Snyder (On Tyranny).

We look at some of the authoritarian checklist moves by Trump below just within the past year and a few months. Any single one is cause for alarm, but the collection is extraordinary and very dangerous for Democracy.

Those who have studied a lot of American geopolitical, domestic policy, and economic history cannot come up with anything close in prior American history to Trump’s totalitarian threat even in times of war (Wilson gave it a shot in killing free speech in WWI, and he was also a rabid racist. So he is the closest to Trump even if falling well short).

The view of the US among allies has been deteriorating rapidly and could get much worse in coming days if Trump pulls the trigger on massive escalation in the Mideast. At some point, the combination of massive deficits, economic uncertainty, and political instability will impact direct investment flowing into the US and could undermine offshore UST demand. The currency wildcard has already been on the table in 2025-2026. When the literal smoke clears in the Gulf, the petrodollar history of recycling into US investments could see material setbacks.

A QUICK LIST TO PONDER…

Constitutional amendments via executive order

We put this one first since it is recent and getting to be a habit with birthright citizenship and now state voting control in Trump’s crosshairs. The attempt to remove citizenship from those born in the US by immigrants does not hold up to a literal reading of the Constitution. Of course, some SCOTUS members are viewed as captive Trump votes, and some Supremes could change out of their originalist costumes when needed for their political “sponsor.” The arguments on the birthright topic is current news, so there is plenty to read on that topic.

The Team Trump argument on “birthright” was that it was “all about slavery.” That angle was decimated by the arguments that waves of immigrants (notably Irish) before and after the Civil War meant immigration factored into the 14^th amendment (ratified in 1868). Birthright citizenship had also been tested since SCOTUS affirmed it applied to immigrants in 1898 (a Chinese immigrant) at a time when blacks were being disenfranchised by Jim Crow laws in the South. A lot of Irish fought for the Union on the winning side as did many black soldiers. We will see how the Trump-stacked court, who Trump now calls “stupid,” plays this one out.

Attack the media

Attacks on media have escalated with threats to broadcast licenses by Trump and the head of the FCC (one of the Project 2025 authors). The situation has been worsened by direct attacks from the Presidential pulpit on media companies and specific journalists by name in tandem with White house freeze-outs. The rechanneling of focus to friendly right-wing media is par for the course.

The real threat is close allies of Trump gaining control of media assets and shifting the operations toward a state media profile in coming years. That would be a rather Soviet ambition. Fox News hosts are now in key positions in the Cabinet and DOJ.

That threat of media ownership concentration used to be closely monitored and prioritized by the FCC. Now it is tacitly supported by the FCC by favoring friendly interests. One recent example is how the White House put its thumb on the M&A scale to undermine Netflix and favor Trump allies.

Attack education

The attack on higher education from the White House is about inflicting financial damage on schools and painting universities and colleges as elitist, which is the enemy of MAGA. Painting schools as antisemitic is one strategy even though antisemitic idiots can be found in every school, the GOP, among the Democrats, and most certainly in MAGA and the White House crowd. It is not grounds for widespread attacks and financially trashing schools.

The criticism was more than justified for inaction and feeble, slow response, but it is interesting that memories lapsed about the Charlottesville Tiki Torch antisemites (“Jews will not replace us”) and how Trump could only muster up a comment of “Fine people on both sides.” (Reminder: Gary Cohn almost resigned over the weak Trump response).

My own personal view more narrowly on the head of Harvard was, at the very least, she was incompetent and lacked leadership skills. However, her gender and race were perfect for a MAGA broadside. Either way, any head of Harvard that cannot win a debate in Congress with Elise Stefanik should go back to the beginning and enroll in community college.

The leadership weakness at some of these schools was used as a smokescreen and provided a readily available tactic to insist on the “MAGA-fication” of higher education by the White House using a new arsenal of threats. That is tough to do when facts and concepts are core to higher education. Facts tend to be inconsistent with MAGA. It is a safe assumption that Team Trump will not be investigating any schools in deep red states for racism or Islamophobia.

Attacking education is an old trick, but it harms free speech and generates even more division in the country. Division is a Trump priority to preserve his power base and cow academics (grants, etc.) and Congress. Such actions also financially undermine schools and thus financial aid for the deserving students who worked hard and earned a spot (not everyone has a daddy that can buy them a seat).

Attacks on universities also undermines critical investment in areas such as plant and equipment, technology, and housing. The financial penalties discourage infrastructure investment in the local economies. The economic multiplier effects are there. The fact that such local economies tend to be blue cities of course was the cherry for Trump.

In the end, you cannot cut through the irony and hypocrisy with a chainsaw given how Trump has prioritized Ivy League status in his own life (still need to see those transcripts!). The fact that so many GOP noisemakers have Ivy League degrees reminds us that DEI applies to home state locations also (i.e. it is easier to get accepted from Arkansas than NY, Connecticut and Massachusetts). The JAG career plans of some notable GOP Senators who were part of the applicant pool to places like Harvard get some “diversity” treatment also for “military” status. Few would dare to admit that or even bring it up.

Attacking top universities also undermines research budgets for those who cure disease and reward the world (that is economically the best deal in town for research economics and risk-reward). China will exploit those penalties in areas such as biotech, medicine, and pharma. China has now eclipsed the MIT area in Cambridge in biotech. High value industries were supposed to be protected by Trump (see Not Again: Why the United States Can’t Afford to Lose Its Biopharma Industry 2-29-24). Recruiting biotech by China got more press in media such as the Boston Globe. The fact that Trump is slapping high tariffs on pharma while undermining academic research is more than a little dumb. Punishment of non-supporters takes priority.

Inflate external enemies and vilify opposition parties…

In the 1920s and 1930s, Germany used the threat from Communists (the “Reichstag moment” reference cited in the 2020 election period by Milley). Chile and Argentina had the same boogeyman on the way to mass murder (backed by US interests). China had the US as the enemy after 1949. North Korea is obvious enough, but they will just kill you if you look cross-eyed. That is a simpler model. Russia has Ukraine and Poland and anyone who is embracing Democracy. There is always something to inflate and use.

Now it is Democrats (“radical left”) as part of the overly repeated Trump refrain. European nations that are not led by strongmen are the bad guys. Attacks on Europe now get more ammo since they did not take orders from Trump after the fact on Iran. Russia gets a pass by Trump for Ukraine. Instead, China is the enemy for Trump and Congressional talking heads. The theory is that Trump wants the EU to break up and he can strike deals with China and Russia as the “new Triumvirate.”

That creates hard choices for the center right (“Join the red hats or die)”. The center left seems homeless and downtrodden. The reality here is that self-identified independents are bigger than the GOP or the Democrats. Trump will face an uphill battle with independents in 2026 if he continues down the current path. That said, the Democrats always fall for the traps and need to do better work in reaching Independents, who will be the key swing factor.

Attack law firms

This move against the legal profession was headline material for some time as Trump set a goal of vengeance on lawyers. He was targeting and financially damaging major firms that were willing to represent legal opposition to Trump policies in the White House or in his personal behavior. It could not have been more brazen. Some law firms fought and won. Some did not fight and saw no cash value in having a spine.

Stack the Department of Justice and Courts

The DOJ has been self-evident in staffing intent (Pirro, Patel, Halligan, Habba, the rogues gallery, etc.). In a discipline where knowledge of the law is supposed to reign, it is now about personal attachments to Trump and the vindictive pursuit of enemies. We will not dwell on it. Turn on the TV. The DOJ had widespread purges and has become a halfway house for loyalists and mediocrity who do Trump’s bidding.

Attack judges

This is a carryover from Trump 1.0 with a gender, ethnic and a racial tinge often at play. Now Trump feels emboldened to attack SCOTUS as we saw recently. They have jobs for life, so that may not be the best strategy.

Purge the military

This has been a self-evident process from the start but has accelerated with internal opposition to the Iran strategy. The recent senior military turnover begs more than a few questions on motives and intent. Hegseth has accelerated stacking his team with “his kind” (white, evangelical, and obedient). The blurring of religion and military power is considered an outrage even among many Christian military experts and retired leaders. His overt racism has infected the promotion process.

ICE as freelance enforcers

The role of ICE has been a major headline controversy that we do not need to replay. It has flowed into the budget shutdown with little room for compromise on basic reforms. The masks and violence is easy enough to see on video. The Gestapo and Stasi did not wear masks. Neither do city cops or “Staties.” Even the Nazi Brownshirts did not wear masks. A good compromise might be to have ICE wear armbands like the Brownshirts. At least there is a precedent.

That simple mask requirement is a divide without a bridge, which says a lot. The doxxing theme applies to all. On the short list of very bad ideas would be showing up at the door of a roid-rage ICE employee who owns an assault rifle and multiple handguns. On the other hand, if an ICE enforcer is ashamed to show his face, maybe he should think that through.

The massive budgets allocated to ICE is a warning sign for those worried about Trump ambitions as ICE moves from seizing and abusing immigrants (and beating on protestors) to manning airports. The logical question is “What will they be doing next?” Manning voting stations? Beating down 1^st amendment protests?

The extraordinary outlays to build more de facto internment facilities is a daunting wildcard in how far a “wannabe dictator” (to quote the former head of the Joint Chiefs) will go to suspend elections and discourage free speech and demonstrations. The fact that ICE has a bigger annual budget than the Marines raises some concerns for obvious reasons.

Shadow immunity promises for ICE. Jan 6 Part Deux?

The blanket pardon for all the Jan 6 criminals and the signals (clear statements in the case of JD Vance) of immunity from prosecution or state level prosecution for ICE sends a less-than-subtle signal to “stand back and stand by” as the next election approaches. What will happen before the election between now and then and what will happen after is a matter of speculation. What has happened already in pardons and non-prosecution is a fact. That encourages more bad behavior as Trump’s ratings hit all-time lows.

To go where no man has gone…

This above checklist is unprecedented in US history for a President even if some pieces of it surfaced occasionally along the way. It is a Trump-only set of behavior patterns across the 250 years the nation will be celebrating in 2026.

SCOTUS and Congress are the only ways to head this off. It’s time for courage and integrity to make a comeback.

Market Commentary: Asset Returns 3-30-26

Glenn Reynolds, CFA — Mon, 30 Mar 2026 14:53:11 GMT

It will only be a small, brief holy war! Trust me.

The asset return performance in 2026 has been ugly with a raft of negative numbers in tech and negative impacts on duration.
Unfavorable YTD UST curve shifts throw the favorable move of 2025 into reverse with sharply higher mortgage rates a threat to housing (see UST Deltas: Elevation Realities 3-29-26). We see bouts of UST curve relief (including today) as the handicapping ebbs and flows.
A wide array of energy related household costs and price threats could undermine consumer health, spending appetites, and GDP growth after a poor set of 4Q25 growth numbers (see GDP 4Q25 Second Estimate: Sharp Move Lower 3-13-26).
The stagflation threat remains real, and the juggling act of inflation vs. payroll fears and cyclical growth setbacks make for a very challenging set of conditions for the FOMC, which has seen the predictability of policy thrown into a state of disarray with Warsh facing a big challenge when he eventually gets in front of a confirmation process.

The update of the high-level debt and equity benchmarks captures the obvious pain of 2026 with all negative numbers for 1-month and 3-month timelines for both debt and equity. Tech and growth stock returns in the chart are especially ugly with double digit negative returns for the NASDAQ and Russell 3000 Growth lines.

The recent correction headlines for the Dow, NASDAQ and Russell 2000 raise the question of whether the S&P 500 will get there in the holiday-shortened week. The S&P 500 closed Friday only down by -8.74% from the late January peak. The “buy the dip” discussions will be a recurring feature until the escalation risk plays out to a finish.

The rolling return visual

The positive vs. negative symmetry has been grim over the 1-week, 1-month, and 3-month horizons. We see the weak numbers in 2026 starting to eat into the still favorable 1-year returns.

The Magnificent 7 heavy ETFs…

The tech bellwethers show only 1 positive weekly return with Apple (AAPL). We see zero positive returns looking back over 1 month. Over 3 months, the only 2 lines that are positive are Taiwan Semi (TSM) and the Semiconductor ETF (SOXX). For 6 months, we are up to 4 positive lines (only 3 tech lines) with the Semi ETF (SOXX) and Taiwan Semi (TSM) well ahead of the comps. Alphabet (GOOGL) is a distant #3. The Equal Weight S&P 500 Index (RSP) was barely positive for 6 months at +0.76%.

The commentary below is mostly a cut-and-paste from an earlier post on LinkedIn on Sunday with some additional inputs:

The chart details the weekly returns for the 32 benchmarks and ETFs we monitor. While this week overall was another grim one with NASDAQ and S&P 500 posting negative returns, the small cap Russell 2000 and Midcaps posted positive returns for the week even as they struggled YTD with small caps in the red and midcaps slightly above 0% YTD.

Small caps had already entered correction territory the prior week. The S&P 500 shows half the industry sectors in correction as the S&P 500 and NASDAQ reside in the bottom quartile this week as noted in the chart. The11 S&P 500 sectors showed a higher positive count this week than the last few with the positive count doubling to a still unsightly 4 of 11. The 4 positive S&P 500 sectors included Energy, Utilities, Consumer Staples, and Materials.

We see a positive vs. negative score of 13-19 this week in the 32 asset lines in the chart, and that is better than the 6-26 last week and the 3-29 the prior week. Tech was a mess last week with the Equal Weight NASDAQ 100 ETF (QQEW) in last place and the bottom 4 including Communications Services (XLC), the Tech ETF (XLK), and NASDAQ (IXIC).

The UST curve has been going the wrong way in 2026 with UST deltas rising YTD. We saw 6 of 7 bond ETFs in negative range this week with only the short duration UST (1Y-3Y) ETF (SHY) able to edge (barely) across the zero line into positive range.

We looked at the running YTD UST deltas in a LinkedIn post on Friday and updated that in a separate note on the weekend (see UST Deltas: Elevation Realities 3-29-26). The 30Y Mortgage rates have edged higher with the Mortgage News Daily survey closing at 6.64% on Friday. That comes after a brief dip below the 6.0% line in late February.

As already detailed in separate commentaries, the FOMC handicapping has been dramatically revised since the Iran fallout. Using the Oct 2026 FOMC meeting as a guide, FedWatch as of Monday morning has set the odds at 89.7% (up from 74.5% on the weekend) that fed funds will remain unchanged. There is an 8.1% (down from 23% on the weekend) chance of 1 hike and a 2% chance (up from 0% on the weekend) of 1 cut by then. As of 1 month ago, the odds were a 35% chance of 2 cuts.

The shifting debate is whether the oil spike will materially undermine growth and prompt Fed caution. It is worth noting that we have seen negative GDP growth in some quarters during past cycles without an NBER recession flag being thrown.

Iran has complicated life for the FOMC and Warsh. We assume Trump will continue to demand multiple cuts and negative real fed funds rates. That outcome just got more event-driven in nature. It takes more than a few Trump-appointed votes to make that happen.

The commentary below is mostly a cut-and-paste from an earlier post on LinkedIn on Sunday with some additional inputs:

The chart updates the weekly “Tech Check” list with 32 benchmarks and ETFs that we built out since the AI mini-panic and now the Iran drama. The simple realities include a higher UST curve flowing into discount rates that could be used in valuation. Shifting revenue expectations on price and volume are among the more obvious worries.

The positive vs. negative score is not pretty at 5-27 this week. That score is below the 8-24 from last week and 7-21 the prior week. If we take out the Russell 2000 and Midcaps (MDY) from the positive count this week, we only see Cisco (CSCO), Advanced Micro Devices (AMD), and Apple (AAPL) slightly positive.

We see a long negative tail with Micron (MU) on the bottom at -15.5% with Meta (META) also in double digit negative return range at -11.4% after the court decisions. Within the mix of Mag 7+3, we see 6 of the Mag 7 in the red and the same for 9 of the Mag 7+3. That’s a bad week.

The more mature “incumbents” are in the top quartile even if 3 of the top quartile members (Taiwan Semi, Tesla, Apple) posted negative returns. That is a low bar to clear to make the top tier.

The wrestling match around AI undermining current business models is ongoing, and the YTD returns for numerous SaaS-centric bellwethers are downright glum. The trailing 1-month score is 4-28 and 7-25 YTD.

For the YTD period, we see 5 of the bottom 6 in the YTD Tech Check from the SaaS-heavy services tier. YTD returns in the bottom 6 range from Zillow (Z) at -40.7% coming in last to FactSet (FDS) at -31.6%. FDS is 6 notches off the bottom. The top of the lowest quartile was the Software ETF (IGV) with a YTD return of -27.2%.

More investors are flagging the direct and indirect impacts of Iran on pricing, volumes, and overall demand and the potential to undermine unit cost structures. That includes the full range of global tech and services industries from semiconductors to data centers. Assumptions around growth rates (and thus multiples) are subject to challenge.

Meanwhile, cyclical anxiety can flow into IT budgets and what that means for tech sector growth rates and pricing power. Valuation and buy-the-dip signals get debated daily, but the moving parts are anything but straightforward when it comes to Iran. Tariffs were easier for investors to quantify with more confidence.

The 1-month review of the 32 benchmarks and ETFs weighed in at a score of 3-29 with only the 3 main energy ETFs in positive range across the E&P ETF (XOP), Energy (XLE), and Midstream ETF (AMLP). We see a Hi-Lo return range from #1 to #32 at 39 points with Homebuilders (XHB) sitting on the bottom at -16.1%. The median return in the mix of 32 was around -7.0%.

The trailing 1-month score for the 32 “Tech Check” names was 4-28 with Palantir (PLTR) at #1 followed by Intuit (INTU) at #2, Advanced Micro (AMD) at #3, and Cisco (CSCO) at #4. Taking the #1 rank only required a +4.28% return for PLTR. Meanwhile, the bottom quartile showed 7 of 8 lines with double-digit negative returns. Meta (META) sat in dead last at -18.9% after the adverse court decisions. We see 3 of the Mag 7 in the bottom quartile with Alphabet (GOOGL) and Tesla (TSLA) joining Meta in the lowest tier.

The YTD “Tech Check” list underscores a grim year with a 7-24 score. That includes Midcaps at barely positive. The heavy mix of SaaS-centric services names dominate the worst returns with Zillow (Z) in last place at -40.7%. We see such names comprising 5 of the worst 6 with Intuit (INTU) at -37.1%, ServiceNow (NOW) at -35.1%, Salesforce (CRM) at -32.3%, and FactSet at -31.6%.

At the top of the bottom quartile we see the Software ETF (IGV) at -27.2% just ahead of Oracle at -28.2%. That is a grim set of returns at the low end that drove a Hi-Lo range in the 32 Tech Check names of almost 72 points. At the top of the rankings we see Applied Materials (AMAT) at +31.2% with Micron (MU) #2 at +25.2% and longtime legacy leader Intel (INTC) at #3 with a +16.9% YTD.

The 3-month period for the broader mix of 32 benchmarks and ETFs posted a score of 9-23 with energy ETFs (XOP, XLE, AMLP) holding down the top 3 slots followed by the more defensive Utilities ETF (XLU). An interesting twist was the cyclical Materials ETF (XLB) given the heavy chemical mix and the ability of US petrochemicals names to see upward pricing power in the Iran global meltdown. The US producers maintain access to lower cost natural gas feedstocks.

For bond ETFs, we see 6 of the 7 in negative range with the short duration UST 1Y-3Y ETF (SHY) very slightly positive. We covered the UST curve dynamics in this post-Iran mess in a commentary posted yesterday (see UST Deltas: Elevation Realities 3-29-26). The to-and-fro on inflation risk vs. cyclical pressures on payrolls will keep bulls and bears armed with talking points, but the potential for stagflation is on a scale we have not seen since the early 1980s.

Trump was out this morning with escalation threats again and deadlines ahead. Putting war crime threats in print (power plants, water, etc.) is not a PR enhancer with allies. The potential response from the Houthis adds one more major threat to shipping costs and supply and even more importantly a fresh potential oil supply shock via the Bab-el-Mandeb Strait. The threatened actions against Kharg Island and Iran power plants would take the Iran War to a radically more intense level.

The trailing 1-year still impresses at 27-5 as the numbers keep benefiting from earlier results in 2025. The BDC ETF (BIZD) is the outlier at -19.3% with Financials (XLF) in second to last at only -3.26%. Homebuilders (XHB) and Real Estate (XLRE) are showing the adverse impact of the UST yield curve. The Equal Weight NASDAQ 100 ETF (QQEW) joined the 5 negative lines for the past year.

The top tier shows E&P (XOP) and Energy (XLE) well ahead of the pack. The Tech ETF (XLK) is still in the top tier despite the -9.9% performance over the last 3 months. A notable ranking for LTM is the fact that Russell 2000 is ahead of the NASDAQ and S&P 500 despite the small caps being the first benchmark to post a correction in this recent sell-off. The correction parade included the NASDAQ and the Dow to end last week with the S&P 500 a short distance away from the magic -10% correction line. We see a rally today (Monday morning) in stocks and bonds after a rough week.

See also:

Market Commentary: Asset Returns 3-23-26

Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26

Producer Price Index Feb 2026: Getting Warmer 3-18-26

Industrial Production Feb 2026: Capacity Utilization 3-16-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

PCE Inflation Jan 2026: Personal Income & Outlays 3-13-26

Housing Starts Jan 2026: Total Starts Up, Completions Up, Permits Down 3-12-26

Employment Situation Feb 2026: Payrolls Get Ugly 3-8-26

UST Deltas: Elevation Realities

Glenn Reynolds, CFA — Sun, 29 Mar 2026 18:45:09 GMT

Higher tariffs, energy costs, and UST supply are not all that magical.

The combination of Iran side effects and lingering tariff uncertainties is the enemy of duration given the UST trends, but the scenarios also bring materially negative fundamental factors into play at the industry and company level on a global scale.
The impact on mortgages has been damaging with Friday closing at 6.64% for 30Y mortgages. The shifting FOMC odds now point at hikes in 2026, so we can expect a lot of noise from the White House during a Fed transition period that is not even set yet with the DOJ think tank playing games on Powell and some Senate types not happy.
Lurking in the background is the USMCA review that will come at a crucial time when Trump sees worsening relations with all major trade partners around support for his chosen geopolitical game plan. China has much to worry about in the Middle East.

The commentary below builds off a recent LinkedIn post of ours.

The chart updates the YTD UST curve deltas as the market wrestles with inflation anxiety around Iran fallout and gauges how badly the odds of FOMC easing have been damaged. We now see FedWatch showing a higher chance of hikes in 2026 than cuts.

The more intensive the media coverage of the Strait of Hormuz, the more markets hear about the full scale of the supplier chain impacts that go well beyond oil and LNG and spill into a wide range of downstream production supply risks and unit cost pressures.

We have the Houthis in the picture now getting warmed up as well as yet another oil volume threat given the importance of the Red Sea shipping routes and the Bab-el-Mandeb Strait. Oil is the main focal point, but any escalation into the Red Sea would also flow into broader shipping and freight costs overall.

The relationship of cost pressure to pricing is a natural one as the market knew even if the White House was still learning (maybe). Even if the monetary purists will not call it “inflation” and take the “transitory” or “one time” interpretation, more Iran fallout would lead to even more erosion of affordability for the “household basket.”

The threats from Iran fallout cut across the full spectrum from high value-added to commodity-like products. We hear about market setbacks from semiconductors to fertilizers, organic and inorganic chemicals, pharma ingredients, and metals (notably aluminum) among others. Handicapping that into inflation targets from PPI to CPI across regions and subsectors is no small challenge for the burdened planners and economists.

The significance of low-cost power (notably electricity) in the Gulf covers a lot more than just fertilizer/metals. Even data centers are on the alert to risks of escalation and scenarios of more missiles and drones flying (and perhaps boots on the ground). The immediate speculation is around which military actions will amp up (82^nd Airborne drops, Marine landings, bombing escalation of energy assets and power plants, island seizures, etc.). The decisions could bring an exponential increase in secondary and tertiary multiplier effects. Extreme escalation could even pull in Iraq into more action given the heavy Shiite mix in its country and armed forces.

There are also the inherent knock-on effects of rising costs across the supply chain for materials and components as costs need to be eaten or passed on. That means Asia and Europe where exports to the US could have a price impact. At least the dollar is recovering, but that comes with higher rates and higher costs for nondollar economies to buy dollar-based energy and food (notably ag commodities).

The above chart breaks out just the past week’s UST deltas. The front end got a little relief.

The “FOMC Vegas Line” says hikes more likely than cuts….

The shifting odds in monetary policy are something you cannot blame on Powell. There are 19 bodies in the dot plot with 12 FOMC votes (not the 7 Board of Governors). Trump’s foreign policy actions are driving the bus, and the Fed will need to react under its dual mandate (price stability, full employment). We will get a slew of employment data this week including JOLTs, ADP, and the payroll data on Good Friday. The Iran wildcard shifted the weight back toward price stability from payroll unless the jobs data says otherwise.

The impact on the UST curve as shown in the chart is in flux. We already have seen material, stark revisions of FOMC handicapping and mortgages are climbing. The Mortgage News Daily (“MND”) and Freddie Mac 30Y numbers are on the rise with MND posting 6.64% Friday close. Freddie Mac 30Y was set Thursday afternoon at 6.38%, which is up from 6.22% last week and down from 6.65% last year at this time.

In terms of the “Vegas line” on FOMC (i.e., CME FedWatch), we can look to the Oct 2026 FOMC meeting as a guide. As we go to print, we see 74.5% odds of fed funds unchanged, 23.0% odds of 1 hike, 2.4% odds of 2 hikes, and the odds of 1 cut at a cool 0.0%. As of 1 month ago, the odds of 2 cuts by Oct 2026 was over 35%. That has been a very dramatic swing in the handicapping with a lot still to play out.

You can link to the FedWatch site and go meeting-by-meeting for shifting odds. The odds of a fed funds hike rise gradually into June (7.7%), July (9.5%), Sept (20.4%) and then Oct (23.0%). That was from Sunday morning post time.

The above chart is a simple YTD price performance chart of the short duration 1Y to 3Y ETF (SHY) vs. the long duration UST 20+Y ETF (TLT). It is a low ambition chart that breaks out how the bond ETF curve risks played out so far in 2026. We see both in negative territory YTD in price returns. Duration took a hit on the curve shift YTD.

For the TLT, the 1-month return as of Friday was -5.6% across a timeline when many were still talking about FOMC easing. As evident in the time series, TLT was shaping up as a winner into February and then reversed course with Iran and is now back in negative range. We covered those shifting odds on “cuts vs. hikes” in the prior chart. SHY for the 1-month was a slight negative at -0.68%.

The above swings unfolded during a period where we still heard Powell blamed by Trump for everything and Trump’s own policies blamed for nothing. That is his right to indulge, but the 19 (12 + 7) dots in the dot plot are more than one economist with opinions. They know as a fact the “buyer writes the check” for the tariff (Trump still says the seller and selling country pays. That is false.). The fact that Trump sticks to that version of “facts” on tariffs is alarming. Pride – whether admission of error or just being wrong – dictates reality. Export that mentality to “war decisions,” and that offers troubling signals.

If an asset allocation strategy is pondering the basic, high level asset allocation decision of equities vs. bonds, the last 60 days tell a story that life just got more complicated. Over the past month, the UST curve took a decided turn for the worse as detailed above. That backdrop faces considerable uncertainty in the Iran War and related reverberating effects that hit many different subsectors in the US as well as bringing severe global impact (see Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26).

The above chart updates the running 10Y UST vs. the Freddie Mac 30Y mortgage (Freddie is set on Thursday). We see the 5.98% recent low for 30Y ahead of the invasion. The 10Y UST drives 30Y mortgage rates and it has been going in the wrong direction.

The above chart updates some notable points in history for 30Y mortgages and the UST yield curve. The dates include Friday’s numbers and the yield curve and mortgage rates at the end of the peak homebuilding year of 2005. We also include mid-2006 as the quality erosion in RMBS (notably subprime) was starting to rattle some corners of the market.

That mid-2006 period was before more serious problems in 2007, when hedge funds started blowing up and mortgage banks were seeing the crisis unfold in the summer of 2007 (e.g., Countrywide was soon rescued by BofA) on the way to the systemic bank crisis of 2008.

We highlight that current mortgage rates just moved ahead of 2005 with the next stop potentially at the mid-2006 levels. Things did not go well for housing after that. We also highlight the flat yield curves of late 2005 and mid-2006 and how that contrasts with the upward slope of the UST we see today. Some FOMC tightening in 2026 or some upwards shifting by the UST curve would raise a lot of bearish lookback commentaries.

The above chart updates the 2Y to 30Y slope using the shorter time horizon while the chart below details the long-term time horizon from 1984. We see the curve slope effects of rising inflation and then into a tightening/easing cycle with the recent 2Y to 30Y at +110 bps, which is only modestly below the long-term median of +122 bps.

The period from early 2021 to current times was very distinctive on the journey from ZIRP and then across the most intensive inflation cycle since the early 1980s. The 2022/23 period saw a relatively brief but very successful tightening cycle that triggered no recession. By the end of 2024, CPI was back straddling the 3.0% line at 2.9% in Dec 2024 (see CPI Feb 2026: It’s Making You Wait… 3-11-26). Trump likes to pretend his term started in Jan 2025 at 9.1% inflation.

During 2022, the economy pushed right through the worst of it with low unemployment and higher rates of personal consumption expenditure (PCE) growth (see Unemployment, Recessions, and the Potter Stewart Rule 10-7-22). Financial assets (debt and equity) were slammed in 2022 by the tightening cycle and market worries but came storming back in 2023-2025 (see Total Return Quilt Across Asset Classes 2008-2025 1-2-26).

The challenge now has more fundamental factors at work that are hitting economies hard globally with the worst of the lag effects ahead.

The journey across the cycles – economic or monetary – shows a wild ride with the 2Y to 30Y slope posting material moves for bond asset allocation in the “duration vs. credit” decision.

A stagflation scenario makes the allocation process especially difficult. That will be the challenging exercise in allocation decision-making ahead. We have not faced this type of decision since the period when the modern capital markets and corporate bonds were just getting launched in debt markets (early 1980s).

The severity of the “Iran trap” and very unstable and dysfunctional US political backdrop will be brutal to navigate. Even getting Warsh nominated is being held back by the brain trust at the DOJ investigating Powell in a politically motivated intimidation action. The leadership of the FOMC is thus under a cloud for a while.

Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26

Producer Price Index Feb 2026: Getting Warmer 3-18-26

Industrial Production Feb 2026: Capacity Utilization 3-16-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

PCE Inflation Jan 2026: Personal Income & Outlays 3-13-26

Housing Starts Jan 2026: Total Starts Up, Completions Up, Permits Down 3-12-26

Employment Situation Feb 2026: Payrolls Get Ugly 3-8-26

Market Commentary: Asset Returns 3-23-26

Glenn Reynolds, CFA — Mon, 23 Mar 2026 19:20:57 GMT

A Whole New World…for 5 days?

The wags are already out there declaring “Taco Monday” but the ability to manipulate markets with a combination of brinkmanship and false deal chatter will remain a tactic to watch… that is, until it stops being a tactic.
The matchup of Trump whims vs. Iranian ideologues is a very challenging game when one side is offered extinction (or submission) and the other side shows a lack of consistency and confuses the world with so many conflicting statements. The backdrop will remain an endurance contest until the offramp materializes and Hormuz opens to a wider range of nations.
The rising cost of energy remains a fact of life with the question of “how high and for how long” the ongoing handicapping exercise. The big decline in oil today still sits on a very thin layer of assumptions. As we saw in the FOMC odds-making data (e.g. FedWatch) the probability has now shifted to negligible odds of FOMC easing in 2026 with higher odds of hikes by the fall per FedWatch (see Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26).
Given the whipsaws of information and disinformation that are intrinsic to this high stakes “game theory” (if it can be called that), we saw the VIX swing to 31 before dropping back to just over 25 as we go to print. The Hormuz situation is being managed in a way that helps Iran (and Russia) and takes some pressure off China and others in Asia who are getting very annoyed. Meanwhile, Europe and Trump hold tighter to their mutual disdain (see VIX: Market Still Not Getting the Vapors 3-6-26). That could spell trouble later on trade.

The above table updates the running returns across a range of timelines for our high-level debt and equity benchmarks. We line up the indexes in descending order of 1-year total returns.

The ugly 1-month numbers are apparent in the across-the-board negatives for debt and equity. For the rolling 3-months, only the Russell 2000 small caps generated a minimal positive return of just under +1.0%. Looking back over 6 months, large caps still struggled in the red zone while Russell 2000 and Russell 3000 value were at least positive. Growth benchmarks were negative with NASDAQ at -4.0% and Russell 3000 growth at -8.5%.

The rolling return visual

There is not much mystery in the return symmetry over 1-week, 1-month, and 3 months with the heavy weighting of negative returns. The story is clear with the word “correction” creeping into the market commentary lately.

The reality is corrections are quite common across cycles, so that is routine across time. The 2018 volatility in Trump 1.0 saw some corrections and even bear market commentary after a summer of 2018 that also saw some record highs (see Histories: Asset Return Journey from 2016 to 2023 1-21-24). Few in Washington seem to remember that 2018, back during Trump 1.0, saw negative returns on all the major bond and equity indexes. Cash was a top performer with sub 2% returns. 2018 continued what would be a record expansion from mid-2009 until COVID in Feb 2020.

What makes this market different is the long-term speculative flavor in tech and AI and now the turbocharged short-term speculation of geopolitics and how an Iran War will play out. Relative to the fruitless wars in Afghanistan and Iraq, a sustained clash with Iran would be without doubt the most unpredictable kind of war. That is especially the case given the history with the US vs. Iran, the decades of preparation by Iran for a war with the US, and the radical extremism of a heavily indoctrinated nation of over 90 million. Trump is not dealing with a spineless GOP Congress. This is the “bomb vest crowd” and not a limp and lame Senator looking to duck a primary. Trump may be using the wrong tactics.

Further below, we also look at the YTD “Tech Check” peer group of 32. That YTD timeline had a top quartile with negative returns in the bottom 2 slots with the Russell 2000 and Midcaps. The YTD charts for the tech check showed a 6-26 score for positive vs. negative.

Tech was the defining broad sector play with “AI fixation” but that started to go awry on AI fallout speculation. Now we add a damaging Iran War backdrop, energy spike, and supply crisis not only in energy but also across numerous critical supplier chains (helium sulfur, fertilizers, pharma inputs, etc.) that flow into pain for tech and agriculture among others.

The Magnificent 7 heavy ETFs…

The above table updates the tech bellwethers against some broad benchmarks and notable subsector ETFs. For the week, we see a single line in positive range with the Semiconductor ETF (SOXX). All the Mag 7 names are negative and the same for the collective Mag7+3 (with Taiwan Semi, Broadcom, and Oracle). The Equal Weight NASDAQ 100 ETF (QQEW) was second with a negative return while Tesla was on the bottom at -5.9% and NVIDIA second to last at -4.2%.

We see a lot of negative returns across 1-month and 3-months with Tesla uglier than most back to 3 months. Even NVIDIA is in the red back to 6 months. Microsoft is in the red all the way back to trailing 1 year. Meta and Amazon generated negative returns back to 6 months. This backdrop is not 1999-2000 with the wide array of cash bleeders, but the valuation excess debate will not go away.

The software leveraged finance excess will remain a hot topic in private credit and how more trouble could reprice higher risk credit alternatives and lead to more dramatic HY bond repricing from the bottom up, but that is a story for another time.

The commentary below is mostly a cut-and-paste from an earlier post on LinkedIn on Sunday with some additional inputs:

The above chart posts the weekly returns for 32 benchmarks/ETFs we monitor. The 6-26 positive-to-negative score marked an improvement from the 3-29 last week. That was a low bar.

Narrowing down themes is hard since it was a week where most everything went wrong even if energy assets performed well. Rates, cyclical expectations, fear of stagflation and myriad scenarios including steady escalation of a damaging war has dramatically shifted the odds of Fed easing and rising odds of FOMC hikes.

We cover the revised probabilities from FedWatch in a separate note (see Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26). The news is not good even if Trump once again backed down by Monday on his threat to escalate by bombing civilian power assets (actually a war crime). That action would have crushed markets and set off chain reactions in the Gulf. The stagflation scenarios remain stubborn.

The checklist presents a range of fundamental, financial and geopolitical risks subject to decisions that face a lot of scrutiny. There is no shortage of “March of Folly” history where leaders ignore the realities of critical risks that cause wars and bring severe consequences. The rise of nationalism (think Vietnam), political ideologies (think China), ethnic enmity (think Balkans), religious factors (think Middle East) or racial lines (think South Africa) have brought their share of brutal wars and mass death.

Power-hungry, arrogant leaders often think they know more than everyone else (whether “the Best and Brightest” of Camelot or MAGA) and often fail to properly factor in underweighted risks. If they fail, they go about finding someone to blame when it all blows up. We are now in one of those N+1 moments.

Bad decisions and flawed assumptions are reflected in the current misinformation waves and recurring brinkmanship. The idea seems to be you just threaten to kill people to get them to submit. It is not a new strategy, but it is usually not plan A when you threaten the “martyr” and “bomb vest” culture.

Away from war scenarios, interest rate sensitivity and global cyclicality remain headwinds with Base Metals (DBB) last in weekly returns and Utilities (XLU), Materials (XLB), Homebuilders (XHB), Consumer Staples (XLP) and Real Estate (XLRE) among the worst performers. Materials (XLB) faces hydrocarbon-heavy costs and cyclical end markets.

The S&P 500 posted positive returns in only 2 of 11 sectors with Energy and Financials. In the ETF mix, XLF faced tough headlines and negative returns for the 1-month and 3-months. XLF is 2nd to last over 3 months with only Consumer Discretionary (XLY) worse. When financials and consumer names both struggle, that should ring some bells.

The 6 of 32 positive include 3 across E&P (XOP), Energy (XLE), and Midstream (AMLP). We see stragglers such as Financials (XLF) and the BDC ETF (BIZD) back in positive range this week. BDCs were a rock bottom performer over LTM at -15.6%.

Transports (XTN) was barely positive after posting negative double-digit returns over the trailing 1-month on airline pain and the potential for freight trouble as fuel cost soar and working capital dislocation could plague trade flows.

The commentary below is mostly a cut-and-paste from an earlier post on LinkedIn on Sunday with some additional inputs:

The above chart updates the returns on our “Tech Check” names that we started tracking with the AI replacement panic before the Iran War pyrotechnics. This week we added 4 more names to the list for a total of 32 companies, market benchmarks, and ETFs.

In descending order of market cap, we added Micron (MU) with $477 bn in market cap, IBM with $227 bn, ServiceNow (NOW) at $115.4 bn, and Adobe (ADBE) at over $101 bn.

IBM checks off a box as a legacy diversified tech and services operator. NOW and ADBE are in the IGV ETF. Of the four added, Micron was ranked #1 in performance YTD with IBM in the 3rd quartile and NOW in the bottom quartile at a YTD of -27.9% just ahead of ADBE at -29.1%.

The return score weighed in at 8-24 for positive vs. negative with fresh signs of a slow SaaS rally as AI displacement fears struggle to find the right valuation. Intuit (INTU), Zillow (Z), FactSet (FDS), and Salesforce (CRM) were in the top quartile this week. All four of those are deeply negative YTD and in the bottom quartile returns.

The top tier performers for this week were Applied Materials (AMAT) at #1 followed by Advanced Micro (AMD) at #2 with Qualcomm (QCOM) and the Semi ETF (SOXX) in the bottom two slots of the top tier.

The Mag 7 was entirely in the red with 4 of 7 in the bottom quartile (TSLA, NVDA, MSFT, and META). We see Alphabet (GOOGL) near the upper end of the second quartile with Apple a few slots below that, also in negative range. Within the Mag 7+3, we see Oracle (ORCL) and Broadcom (AVGO) in the bottom quartile with Taiwan Semi (TSM) just across the line at the bottom of the 3rd quartile.

Making a top quartile spot only required a positive return. The NASDAQ was negative and in the third quartile with the S&P 500, Midcaps, and the small cap Russell 2000. The Software ETF (IGV) was at the top of the third quartile.

We await the market wrestling with how to treat the Iran War fallout and how that could impact corporate sector IT budgets, AI economics, and how the software players will navigate what is expected to be some credit contraction headlines ahead in private credit.

The 1-month returns for the broader peer group of 32 benchmarks and ETFs weighed in at an ugly 3-29 positive vs. negative. The 3 positive lines were comprised of the E&P ETF (XOP), the broad Energy ETF (XLE), and midstream energy ETF (AMLP). We see 5 of the 8 names in the top quartile with negative returns for the month. That tells the story by itself.

The bottom tier shows the increasing worries about UST curve dynamics and stagflation worries. We already detailed the radical shift in FOMC handicapping, and the steep UST curve in a separate commentary (see Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26).

The bottom performer was Homebuilding (XHB) as residential struggles in this market (see New Homes Sales Jan 2026: The Nays Carry 3-19-26, Existing Home Sales Feb 2026 3-10-26). We see some of the commodities sensitive cost structures feeling the pain and the same for cyclicals. The Transports ETF (XTN) has been hit hard as jet fuel spikes and diesel costs soar. Airlines (excluding Delta) have been crushed even if they see some relief today on the oil plunge of the day.

The 1-month “tech check” names posted a score of 8-24 on many of the same issues we discussed in the 1-week section. The challenge for tech valuation is increasing now given the inherent cyclicality of many customers and the potential need to revisit expense and capex budgets.

Challenges such as power costs will keep the focus on unfavorable energy CPI trends (even ex-oil) as electricity and piped utilities gas have been major headlines. Now we add oil into the equation along with soaring downstream products (gasoline, jet fuel, diesel).

We see the top quartile posting positive returns and everything else negative. Within that top quartile mix, we see some gradual recovery from the pain delivered in the SaaS panic. The YTD negative returns are broken out in the next chart. The top quartile in the 1-month returns includes such names as Intuit (INTU), FactSet (FDS), ServiceNow (NOW), and Salesforce (CRM). As detailed in the next chart, all 4 of these names remain deeply negative YTD. We see Zillow still in dead last YTD as that name had more than its share of other challenges.

The YTD Tech check tells a clear story with a score of 6-26. Two of the top quartile names are negative and comprised of Midcaps S&P 400 ETF (MDY) and Russell 2000 at #7 and #8, respectively.

The winners YTD include Micron (MU) at #1 with a dramatic ride higher of +48.2%, Applied Materials (AMAT) at #2 with 38.9%, and Intel (INTC) #3 at 18.9% with the SOXX ETF at #4. Taiwan Semi (TSM) and another legacy name, Cisco (CSCO), rounded out the 6 of 32 running with positive returns YTD.

Sitting on the bottom is the collection of names impacted by the AI displacement panic. We see Zillow (Z), Intuit (INTU), ServicesNow (NOW), FactSet (FDS), and Salesforce (CRM) all worse than a -26% return YTD. Adobe (ADBE) was also in the bottom mix at -29.1% as various software names drove the Software ETF (IGV) to -21.4% at the bottom of the 3^rd quartile.

The 3-month mix across 32 benchmarks and ETFs stayed relatively consistent with a score of 10-22 and energy related ETFs (XOP, XLE, AMLP) holding down the top 3 spots with Utilities (XLU) a distant #4.

We see no tech-centric names in the top quartile, but the benefits of the earlier sector rotation saw the top quartile feature Industrials (XLI), Materials (XLB), and Consumer Staples (XLP). Real Estate (XLE) managed to edge into the top quartile despite the UST curve setbacks.

The bottom quartile mixed in some tech with interest rate sensitive equities (XHB) and some asset quality concerns found in the BDC ETF (BIZD) and Financials (XLF).

The trailing 1-year score of 29-3 is still living off the “old days” with the top quartile featuring Energy (XOP, XLE) on top and the Tech ETF (XLK), NASDAQ, and Communications Services (XLC) in the upper tier mix. Industrials (XLI) has been a steady, solid performer with a display of cyclical resilience and solid earnings trends. Small caps had a good year and beat the S&P 500, but that has been faltering of late.

Producer Price Index Feb 2026: Getting Warmer 3-18-26

Industrial Production Feb 2026: Capacity Utilization 3-16-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

Market Commentary: Asset Returns 3-15-26

PCE Inflation Jan 2026: Personal Income & Outlays 3-13-26

Housing Starts Jan 2026: Total Starts Up, Completions Up, Permits Down 3-12-26

Market Commentary: Asset Returns 3-8-26

Employment Situation Feb 2026: Payrolls Get Ugly 3-8-26

Market Lookback: Confusion Reigns, Dislocation Pours 3-22-26

Glenn Reynolds, CFA — Sun, 22 Mar 2026 20:00:38 GMT

All I said was “We don’t use the Strait.”

The “we don’t use the Strait” line is on a very long list of statements that Trump’s own terminology would qualify as “low IQ and stupid.” A globally connected market is a reality whether with or without tariffs. The Strait is a crucial factor for all major US trading partners. Under the Powell “you break it, you own it” rule, the Iran War and energy fallout is another case of “the buck stops everywhere else.”
The game of framing secondary and tertiary multiplier effects of policy actions has never been a strength of Team Trump or the economic mouthpiece echo chamber at the White House (think “seller pays the tariffs”). Hasset saying the economy would not be affected but “the consumer might be” was a new low. National Retail Gasoline hit $3.94 per gallon (3-22-26, Source: AAA) and is up 35% in a month. Diesel, which is literally a key driver of freight costs, rose to $ 5.25 or +41% higher in one month.
The energy market chaos is now juxtaposed against the material tech valuation uncertainty that has spilled over from AI. Inflation worries are heightened. The FOMC outlook is now posting odds that favor “no easing” for the remainder of 2026. We even see rising tightening odds. Trump can’t blame Powell or Biden for this one (but he will). Higher short rates or any bear steepener of the UST curve undermines sea level economics (demand, unit costs, working capital, durable goods financing, and more), hurts valuation of growth equities, and falls directly on the housing sector via mortgage rates. The Mortgage News Daily survey ended Friday at 6.53%.
The Fed meeting gave the impression that the SEP report and dot plot should be discounted. The SEP report saw mixed adjustments to the overall 2026 expectations given the array of highly uncertain variables. Even Powell essentially said (our paraphrase): “If you were going to skip a SEP report, this would be the one.” We revisit the overall flavor of FOMC updates and the dot plot further below.
The geopolitical policy incoherence on the Iran War game plan dictates energy market handicapping (escalation risk by US, duration of Hormuz closing, damage to infrastructure now or potentially coming, Gulf nation planning for their operations). The discussion of how to frame inflation fallout is complex, but monetary policy predictions lean toward “do nothing for a while.” That is what the market is signaling. The consumer reactions and corporate budgeting plans in turn will set the bar for the cyclical outlook with the consumer (PCE) at 68% of GDP and small business the key driver of payroll. Fixed investment plans (capex) could shift along the GDP line mix.
The global nature of oil and gas supply/demand imbalances means global cost trends and supplier chains face turmoil regardless of the US being a major oil exporter. The US energy players will mint cash flow. So will the Canadian oil sands. On the other hand, the semiconductor chain (helium has been a hot topic), pharma ingredients (downstream derivatives), the fertilizer chain, and myriad unit cost pressures along the supplier-to-OEM chain will be headwinds. Cyclical end market demand comes into play as moving parts across US export demand and US import pricing. Data centers will face new challenges in costs and project economics. That gets back into the AI longer term valuations.

The above chart updates the equity market fallout across some of the major trade partners using benchmark indexes. We detail US, Europe, China, and Canada above. The returns on such ETFs reflect the effects of Iran, and it is not pretty. We have commented on these time series frequently. The US had been lagging in last place through much of 2025 on weak currency trends. That has now shifted as everyone tanks.

What we see since the Iran War started is that the US has moved up to #2 behind Canada but everyone has faded sharply. The Iran fallout hits everyone even if you don’t – in Trumps words – “use the Strait.” For the record, that statement is factually incorrect since the Strait “supplies the suppliers” with Europe, China, Taiwan (and more) very much influenced directly by the Strait. Similarly, the tech sector has been getting analyzed by industry experts on how the supplies out of the Gulf region are critical drivers of tech activity in Taiwan and South Korea, who are both selling critical tech goods to the US. That certainly matters to the US. So does the fertilizer cost issues in the ag sector.

FOMC update: small moves, big questions

The FOMC is not getting the focus it was getting in 2025, with minimal expectations of near-term action priced into the market. For a quick summary of the SEP moving parts, we line up a few points below for those who took Powell’s unspoken (sort of) advice to discount current forecasts in light of the magnitude of the risks and moving target variables:

Dot Plot: The score was 7 of 19 votes calling for no change in 2026 and 7 calling for 1 cut as “appropriate.” There were 2 dots calling for 2 cuts, 2 votes for 3 cuts and 1 calling for 4 cuts. The 4 cuts would be in the 2.5% to 2.75% range. As of now, Trump has been demanding a negative real fed funds rate.
GDP Growth: The median ticked higher to 2.4% in March from 2.3% in the December meeting, so it is better than what we saw in 2025 after the weak 4Q25 numbers (see GDP 4Q25 Second Estimate: Sharp Move Lower 3-13-26). The 2% handle GDP growth is standard mediocrity in the new millennium. As a reminder, annual GDP growth was 2.1% in calendar 2025 vs. 2.8% in 2024 (just don’t tell Hassett).
PCE inflation: The headline PCE inflation median ticked up to 2.7% for 2026 from the 2.4% in December 2025. The energy cost and tariff cost estimates require a Ouija board at this point to commune with dead doves and stuffed hawks. Payroll will be the swing factor but with the first stagflation threat since the Volcker years.
Core PCE inflation: The Core PCE median rose to 2.7% in March from 2.5% in Dec 2025. That is still well above target, and that might be one reason why we saw a single hike cited as appropriate on the dot plot in 2027 (none for 2026). Odds of hikes in 2026 are rising on FedWatch.
Fed funds rate: the median projected fed funds rate for 2026 was 3.4% again in March or the same as in the December meeting.

The “Summary of Economic Projections” (“SEP report”) did not seem to have much impact at all with the Iran War ramping up, Trump raging, energy costs soaring with supply shrinking, and macro variables moving. The fact that the FedWatch odds have shifted so dramatically across the week was troubling and we just saw a whole new set of numbers roll into the FedWatch site today (Sunday).

If we use the Oct 2026 Fed meeting as an example of shifting odds, the volatility of these odds are picking up. We had been updating the odds this weekend and this morning before we looked back at the data, and it has been radically overhauled on the FedWatch site. That tells a story of the rate uncertainty.

The odds of no action in Oct 2026 was 92.0% to end the week. Those just shifted today to 59% odds of unchanged. Now the odds of one rate hike are at 29.2%. One week ago, the odds of a rate hike in Oct was 0%. That is a major shift in the numbers updated as of today. Last week, the odds of a cut by Oct 2026 was 50%. The odds of a single cut in Oct 2026 are now down to 6%. Two hikes is now at 5.4%.

Handicapping how the slope of the UST curve will shift in longer maturity segments of the yield curve has been a major wildcard since the easing cycle began back in Sept 2024. The bear steepener that unfolded after the initial bull flattener in fall 2024 and into 2025 has been tough to shake (see The Curve 12-15-25). We could see a growing worry over an upward UST curve shift.

The above chart updates the DXY trend line showing the recovery of the dollar since the Iran War kicked into high gear. We track that against the 30Y UST. The good news is that the currency risk might now be down the list for international investors. The flip side is the international investors can worry about US inflation, rising rates, and an ungodly increase in UST supply to fund much higher deficits.

“War is hell” is an old one even if Hegseth fails to footnote Sherman (we suspect Hegseth might have desired a different outcome than Sherman. Too DEI.). “War is expensive” also. We will see if any “Supplemental” bill to fund the Iran War expenses (headlines signal $200 bn) will include revenue proposals (aka taxes). Another theory is that the supplemental will be rolled into the $1.5 trillion defense ask for the 2027 budget, or essentially a 50% increase talking point even before the Iran War activity.

The time series updates the 30Y Freddie Mac mortgage benchmark (set each Thursday), and we see 6.22% or around 30 bps below where the Mortgage News Daily survey closed Friday (6.53%).

As housing support legislation gets debated, any potential benefit gets wiped away by Iran War effects as mortgage rates rise. This rate pressure can hit new home sales (see New Homes Sales Jan 2026: The Nays Carry 3-19-26, Housing Starts Jan 2026: Total Starts Up, Completions Up, Permits Down 3-12-26) as well as existing home sales (see Existing Home Sales Feb 2026 3-10-26).

The golden handcuffs in existing sales just got tighter on refinancing costs from the heavy mix of 3% and 4% mortgages held by potential sellers.

The above chart frames the current UST yield curve and Freddie Mac benchmark (horizontal line). The current 6.22% Freddie Mac 30Y is flat with the rate posted at the end of 2005, which was the peak homebuilding year of the housing bubble. We also break out the differential of the Freddie 30Y mortgage vs. the 10Y UST. The current differential is moving closer to the mid-range between the bubble period of 2005 and 2006 when a growing share of RMBS quality was getting “found out” as very high risk in the structured credit boom.

The yield curve now also presents a very different slope than what the market saw in 2005 and 2006. That period saw flat yield curves and an upward shift from 2005 to 2006. The rule of thumb is that flat signals peak or possible recession risks. The other rule of thumb is that stagflation risk throws a lot of rules out the window.

We know what came after that 2006 period as the credit markets melted down in 2008 after freezing in the summer of 2007. The fact that the S&P 500 kept on rising to highs well into Oct 2007 despite the credit market pain is worth remembering.

The above breaks out the UST deltas for the past week in what was a bad news week for the yield curve. As we cover in a separate chart set, all the bond ETFs were negative in what was even a worse week for equities.

The above chart updates the running YTD UST yield curve deltas. The +44 bps on the 2Y UST reflects serious doubt on FOMC easing unless Trump can get Pirro to investigate the entire FOMC. We assume “Judge Jeanine” is still trying to get through Monetary Policy for Dummies. Alternatively, Trump can have Markwayne Mullin threaten to beat up Warsh and any other takers.

As we cover below, there is ample room for the 3M to 10Y slope to steepen based on historical medians. The energy and tariff pain adds to the strain on global “alliances” and potential UST demand challenge (as in ongoing insults and alienation do not promote UST exposure). We also will face a lot more trade clashes in 2026 on Trump tariff action. The record US deficits and funding needs make for a strain on bull flattening optimism if allies start to dial back UST holdings. Stagflation as a threat complicates the journey to a flattening outcome.

The above chart updates the 3M to 10Y slope since 1984. As a reminder, we chose 1984 as a starting point to isolate the distorting visual effects of the record steepening and inversions of the 1980-1982 stagflation double dip. That period saw Volcker prevail in the war on inflation (CPI 1% handle reached by1986).

We detail the UST segment slopes in the box with current levels and long-term medians. The lack of confidence in FOMC cuts during 2026 leaves the shapeshifting debate more about the 10Y UST area. As detailed earlier, the 10Y UST is higher by +21 bps YTD with 3M UST +7 bps higher. The 2025 period posted a bull steepener. As of now, the 2026 action has been a bear flattener from 2Y to 30Y.

Producer Price Index Feb 2026: Getting Warmer 3-18-26

Industrial Production Feb 2026: Capacity Utilization 3-16-26

Market Lookback: The Gulf of Cause and Effect 3-15-26

Market Commentary: Asset Returns 3-15-26

PCE Inflation Jan 2026: Personal Income & Outlays 3-13-26

Housing Starts Jan 2026: Total Starts Up, Completions Up, Permits Down 3-12-26

Market Commentary: Asset Returns 3-8-26