The S&P 500 (Index: SPX) recovered during the Good Friday holiday-shortened trading week. The index closed at 6,582.69 on Thursday, 2 April 2026, up nearly 3.4% from its previous trading week's close.

Given that the week featured news of higher oil and fuel prices, which has been a catalyst for falling stock prices in recent weeks, that outcome seems paradoxical. When you add a surprisingly strong jobs report into the mix, it would seem certain the Federal Reserve would be more likely to hike interest rates in upcoming months. After all, the fear of the Fed raising interest rates to fight inflation from the Iran war surge of oil prices has been front and center in financial news headlines in shaping investor expectations of the future.

But the week saw something different with the actual expectations for how the Fed would be setting interest rates through the end of 2026. The CME Group's FedWatch Tool foresees no interest rate changes through the end of 2026, with a much lower probability of any rate hike taking place. The FedWatch tool even sees a growing chance for a quarter point rate cut in 2027, with the most likely timing of that change coming near the end of 2027-Q3.

What's going on is that the oil price surge is now raising the potential of a recessionary contraction in the U.S. economy, which increased after President Trump's mid-week speech boosted the prospect the Iran war would intensify in the near term rather than come to a resolution as had previously been expected. The heightened risk of contraction would forestall the Fed from hiking rates in 2026 and would support the S&P 500 holding onto its gains during the week in the absence of additional information for how that would affect the various parts of the U.S. economy. The latest update of the alternative futures chart shows the rebound:

As the geopolitical event progresses, we're likely to continue seeing an elaborate dance between investors expectations for inflationary pressures related to the disruption of oil markets, interest rates, and the outlook for businesses as the economy copes with all of it. The market moving headlines of the week that was gives a taste of those dynamics:

Monday, 30 March 2026

• Signs and portents for the U.S. economy:
• Oil passed $100 a barrel, with prices expected to keep rising
• Airlines face fare dilemma as fuel spike threatens travel demand
• Chief Fed minion says Fed will stand still on interest rates, Number Two minion says Fed's policy can handle 'unusual' circumstances:
• Powell says Fed can 'wait and see' how war affects inflation
• Fed watching private credit sector for signs of trouble, Powell says
• Fed's Williams says monetary policy 'well positioned' for 'unusual' circumstances
• Fed's faith in anchored inflation expectations may be coming under stress
• Growth signs developing in China:
• China's factory activity seen returning to expansion in March: Reuters poll
• BOJ minions worried about effect of oil and their own monetary policies on Japan's inflation:
• BOJ highlights inflationary pressure from oil, weak yen
• Bigger trouble developing in the Eurozone:
• German inflation spikes to 2.8% in March as energy costs soar
• ECB minions starting to think they may not have the perfect monetary policy they thought:
• ECB must respond quickly to signs of inflation drift, says Stournaras
• Villeroy says ECB ready to act, but too early to discuss timing of any rate hike
• Wall Street's major averages ended mostly lower to kick off the holiday-shortened week
• S&P 500 is on pace for its worst month since 2022 as broad selloff deepens
• Wall Street indexes mostly fall as Iran war widens

Tuesday, 31 March 2026

• Signs and portents for the U.S. economy:
• Oil Falls on Signs From US, Iran of Openness for War Resolution
• Iran reiterates willingness to end war but needs guarantees- reports
• WTI, June Brent crude futures slide on report that Iran may be ready to end war
• US pump prices hit $4 a gallon
• Private lenders delay reckoning with payment concessions on stressed debt
• US single-family home prices rise moderately in January, FHFA says
• Fed minion warns against letting down guard against inflation:
• Fed's Schmid warns against complacency on inflation
• Bigger trouble, stimulus developing in China:
• China set to extend fuel export ban with small exemptions, sources say
• China's smaller independent refiners to curb output on rising oil prices, sources say
• China to maintain appropriately loose monetary policy
• Bigger inflation developing in Eurozone, ECB minions excited to test their new models of inflation expectations:
• Euro zone inflation surges past ECB target on oil shock
• ECB's new models may help capture shifts in inflation expectations, blog post says
• Nasdaq surged nearly 4% as Wall Street closed higher on potential Iran war resolution news
• Wall Street rallies as traders bet on potential war off-ramp
• S&P 500 Earning Estimates Are Surprisingly Rising And $100 WTIC Oil Is Not Expensive

Wednesday, 1 April 2026

• Signs and portents for the U.S. economy:
• Oil slides after Trump says US will end its war on Iran soon
• Auto industry group calls for scrapping US gas tax, adopting vehicle fee
• Recession odds down sharply after string of better-than-expected economic data
• US mortgage rates jump to 6.57%, highest since August, MBA says
• Fed minions thinking oil price spike is short term event:
• Exclusive: Fed's Barkin says households, firms still see oil shock through a "short-term lens"
• Bigger trouble, growth signs developing in China:
• Factory input costs soar worldwide as Iran war snarls up supply chains
• China's new home prices rise in March; big cities see seasonal pickup, private survey shows
• New BOJ minion worried about potential for stagflation in Japan's economy:
• New BOJ board member warns of stagflation risk from Iran war
• Bigger trouble developing in Eurozone, ECB minions continuing to stand by for action:
• Euro zone factories see jump in input costs, supply snags, survey shows
• Euro zone economy may already be on ECB's 'adverse' path, policymaker warns
• U.S. equities ended higher as hopes of Iran conflict de-escalation lifted sentiment
• Wall Street ends higher on speculation about end to Iran war

Thursday, 2 April 2026

• Signs and portents for the U.S. economy:
• Oil prices jump over 7% after Trump says attacks on Iran will continue
• Instant View: Investor reactions to Trump's speech on Iran war
• US labor market posts big gains, war risks mount
• VIEW US jobs report for March is stronger than expected, likely keeping Fed on sidelines
• Fed minions disappointed U.S. oil production not ramping up faster:
• Fed's Logan says US oil producers unlikely to provide near-term relief for consumers
• Bigger trouble developing in China:
• China services activity growth cools in March, private PMI shows
• Former BOJ minion thinks supply disruptions may force BOJ to put aside rate hike plans, but they don't want to give them up:
• BOJ may be overlooking real risk from Iran war, says ex-c.bank official
• BOJ keeps rate hike door open even as Iran war squeezes firms
• ECB minions starting to worry a bit about Eurozone economy:
• Energy crisis raises concerns for financial stability, ECB's Panetta warns
• German institutes cut growth forecast as Iran war drives inflation higher
• Wall Street ended mixed as investors digested U.S.-Iran war developments
• Wall Street ends mixed as worries linger before Good Friday break

The Atlanta Fed's GDPNow tool forecast of real GDP growth in 2026-Q1 slowed to +2.0%, declining from the +2.0% growth anticipated a week earlier.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a suit-wearing Wall Street bull and bear who look confused after reading a news ticker that says 'OIL PRICES UP' and 'JOBS GOOD' and 'NO RATE CUTS' and 'NO RATE HIKES EITHER'". We made some minor tweaks to the colors of the words in the generated image and their layout to produce the featured cartoon.

The market capitalization of the S&P 500 (Index: SPX) shrank in the first quarter of 2026. Picking up from our Fall 2025 snapshot when the index' market cap was $59.32 trillion, as of the end of 2026-Q1, it has fallen nearly 1.5% to $58.44 trillion for this Spring 2026 snapshot.

In between then and now, the S&P 500's market cap clocked in with a market cap of $60.80 trillion at the end of 2025-Q4, which is the value we would have reported in our Winter 2025 snapshot had we presented it. In the three months since, the total valuation of all 503 stocks included in the S&P 500 has dropped 3.9%.

Much of the change in the index's value during this time was concentrated within the top ten component stocks that make up the benchmark index. At the end of 2025-Q3, they represented 38.9% of the value of the entire index, which increased to 39.2% at the end of 2025-Q4. After the end of 2026-Q1 however, their share of the index has declined to 36.9%.

The following chart shows the relative shares of the top 10 stocks in the S&P 500 at the end of the first quarter of 2026.

Here are the approximate market capitalizations of each of the S&P 500's top ten component firms at the end trading on 31 March 2026:

• Nvidia (NASDAQ: NVDA) $4,184,635,901,084 (7.16%)
• Apple (NASDAQ: AAPL) $3,641,100,791,027 (6.23%)
• Microsoft (NASDAQ: MSFT) $2,700,142,159,638 (4.62%)
• Amazon (NASDAQ: AMZN) $2,226,740,612,169 (3.81%)
• Alphabet (A) (NASDAQ: GOOGL) $1,829,317,090,837 (3.13%)
• Alphabet (C) (NASDAQ: GOOG) $1,694,894,429,210 (2.90%)
• Meta Platforms (A) (NASDAQ: META) $1,449,426,960,152 (2.48%)
• Broadcom (NASDAQ: AVGO) $1,449,426,960,152 (2.48%)
• Tesla (NASDAQ: TSLA) $1,396,826,788,211 (2.39%)
• Berkshire Hathaway (B) (NYSE: BRK.B) $1,005,247,730,428 (1.72%)

All ten of these firms have trillion dollar market caps, with Berkshire Hathaway joining the trillion-dollar club during the past six months.

References

Standard and Poor. S&P 500 Factsheet. [PDF Document]. 31 March 2026. Accessed 1 April 2026.

SlickCharts. S&P 500 Component Weights. Accessed 1 April 2026.

Motio Research reports their initial estimate of U.S. median household income for February 2026 is $87,630, a $360 (or 0.4%) increase from their initial January 2026 estimate of $87,270.

The firm's estimates are based on income data collected by the U.S. Census Bureau through its monthly Current Population Survey. This survey is conducted during the week containing the 12th day of the month following the month in which its data applies. Motio Research adjusts its raw monthly estimates to account for the effects of seasonality and inflation, presenting its results in the form of an index with the median household income of January 2010 assigned a value of 100. The initial value of the firm's U.S. Real Median Household Income Index for February 2026 is 119.2.

The following screenshot of Motio Research's interactive chart shows how this index has changed from January 2010 through February 2026:

Motio's survey-based estimates indicate the pace of growth of median household income has slowed since the end of 2025. The cash and free travel incentives the Trump administration offered to illegal immigrants likely contributed to the exit of large numbers of the lowest income earners in this demographic, whose departure effectively boosted the nation's median household income.

Analyst's Notes

Political Calculations produces median household income estimates using other original data sources that complement Motio Research's survey-based estimates. Because of the ongoing delays in official aggregate wage and salary data being reported, we'll present our estimate for January 2026 in this edition. We expect fully catch up with Motio Research's estimates with our February and March 2026 estimates in early May 2026 when the wage and salary data for both will become available.

Political Calculations' official estimate for median household income in January 2026 is $86,506, which is $575 (or 0.67%) higher than the $85,931 we projected for December 2025. The following chart presents our estimates of U.S. median household income, both adjusted for inflation (blue) and not-adjusted for inflation (red) for each month from January 2000 through December 2025.

Political Calculations' January 2026 estimate is $764 (or 0.9%) below Motio Research's initial estimate of $87,270 for January.

The momentum for most of that gain came from upward revisions of aggregate wage and salary income data. The BEA made significant upward revisions to each of its estimates from July 2025 (+0.41%) through December 2025 (+0.67%). The largest revisions were for October and November 2025, which tied with a +0.73% increase over the previous estimates for these months.

Image credit: U.S. Census Bureau. We modified the public domain image to make it more generally applicable beyond reporting the median household income from 2022.

The United States initiated Operation Epic Fury against the Islamic Republic of Iran on Saturday, 28 February 2026. The S&P 500 (Index: SPX) had closed its trading week the day before, ending at a value of 6,878.88. Through the close of trading on 30 March 2026 the index has dropped 535.16 points, or about 7.8% of its pre-geopolitical event level.

As major events go in the U.S. stock market, at this point in time, the impact of the Iran war is a little smaller in magnitude than 2025's DeepSeek AI shock that sent the S&P 500 crashing between 19 February 2025 and 13 March 2025. The following chart shows both events, with the S&P 500 mapped against its underlying trailing year dividends per share.

The main difference between the two events is the apparent steepness of their declines. As shown in the chart, the DeepSeek AI shock appears to have involved a more severe dropoff, falling a similar amount in a shorter period of time, but we won't know for sure if that's the case until after SPGlobal finalizes the S&P 500's dividened data for 2026-Q1 after the close of trading on 31 March 2026. In the chart, the trailing year dividend data is based on a combination of historic outcomes and quarterly dividend futures that don't precisely match up with the S&P 500's calendar quarters.

In any case, the Iran war event looks set to become larger in magnitude than the DeepSeek AI shock. Will the S&P 500 continue declining so much that it overtakes the combination one-two punch of 2025's DeepSeek AI shock and the "Liberation Day" global tariff event? Or will it recover before it might drop that much?

The S&P 500 (Index: SPX) has dropped for four consecutive weeks, coinciding with the market-moving geopolitical event of the Iran war that began on 28 February 2026. In the fourth week since the Iran war began, the index dropped 2.1% to close out the week at 6,368.85.

Through these four weeks, the S&P 500 has been the strongest of the three major U.S. stock market indices in losing 7.4% of its value since the close of trading on 27 February 2026. The S&P 500 is the only one that hasn't yet confirmed a correction, defined as a 10% decline from its last peak. The index last peaked at 6,978.59 on 27 January 2026 and is now a little over 8.7% below it.

The market moving headlines during the fourth week of March 2026 highlighted the problems Federal Reserve officials are having in reading the state of the U.S. economy to determine the path they will take in setting U.S. interest rates. For its part, the CME Group's FedWatch Tool cut through the Fed's foggy analytical clutter to anticipate no interest rate changes through the end of 2026. Instead, the tool indicates a low probability of rate hikes, giving about a 3 out of 10 chance of a quarter point rate hike in the Federal Funds Rate being announced after the Fed's Open Market Committee meets on 28 October (2026-Q4).

The latest update of the alternative futures chart whose the S&P 500 continued a downward trajectory below the redzone forecast range we added to the chart at the end of February 2026. The centerline of that forecast range is effectively functioning as a counterfactual, indicating where the trajectory the S&P 500 would have taken in the absence of the ongoing geopolitical event.

Through the close of trading on 27 March 2026, the S&P 500 is about 7.3% below that level.

Here are the week's market moving headlines:

Monday, 23 March 2026

• Signs and portents for the U.S. economy:
• Oil falls over 13% on Trump postponing military strikes on Iran energy infrastructure
• US construction spending unexpectedly falls in January
• Fed minions fear inflation, worry about jobs as they debate direction for U.S. interest rates:
• Fed's Goolsbee: Inflation now the greater risk, watching expectations closely - CNBC
• Fed's Miran still believes Fed should cut interest rates - Bloomberg TV
• Fed's Daly: no single most-likely path for rates
• Bigger trouble, stimulus developing in China:
• China limits fuel price hike to cushion impact of rising oil prices
• China's Sinopec will not buy Iranian oil, wants to tap state reserves
• BOJ minions not getting the inflation they want, but still want to hike rates:
• Japan's core inflation slows below BOJ target, complicates rate communication
• BOJ's narrative shift signals dogged commitment to rate hikes
• Bigger trouble developing in Eurozone, ECB minions claim they'll snap into action if they think they need to fight inflation:
• Iran war deals new blow to Europe's industrial heartland
• ECB won't hesitate to act if inflation at risk of getting entrenched, Kazimir says
• ECB must act in case of second-round inflation impacts, VP tells El Mundo
• Stock market ends higher as Trump says deal with Iran could be soon
• Wall Street indexes rally after Trump postpones strikes on Iran's power plants

Tuesday, 24 March 2026

• Signs and portents for the U.S. economy:
• Oil rises, with Brent climbing back above $100 as optimism fades over Iran war de-escalation
• Commentary: Why $100 oil won't break the American Consumer
• US fourth-quarter productivity growth revised down, but trend remains solid
• Bigger trouble, stimulus developing in China:
• Feed cost surge from Iran war deepens pain for China's pig farmers
• China banks eye profit boost as nearly $8 trillion in deposits to be repriced
• BOJ minions not sweating small contributors to inflation:
• BOJ chief expects limited impact on inflation from proposed food tax freeze
• Bigger trouble developing in Eurozone:
• Euro zone economy close to stalling as war takes its toll
• Wall Street ended lower as Iran tensions weighed on market sentiment
• Wall Street indexes fall on worries about Middle East war, interest rates

Wednesday, 25 March 2026

• Signs and portents for the U.S. economy:
• Oil falls as reports of 15-point proposal spurs ceasefire hopes
• US import prices post largest gain in nearly four years in February
• Trump's tariffs had little impact on GDP in 2025, but raised revenue, academic paper finds
• Fed minions thinking they've set interest rates just right for now, report they're losing less money:
• Fed's Barr sees rates holding steady 'for some time' given above-target inflation
• US Fed's loss narrows sharply to $19.6 billion in 2025
• Bigger trouble, stimulus developing in China:
• AI boom accelerates China's chip industry growth as demand strains supply chain
• Chinese food delivery giants surge as regulator, state media call end to price war
• U.S. equities closed higher on talks of a possible U.S.-Iran peace plan
• Wall Street advances as investors bet on Mideast de-escalation

Thursday, 26 March 2026

• Signs and portents for the U.S. economy:
• Oil prices rise 5% as investors fear further Middle East escalation
• Iran war chokes petrochemical supply, sends plastic prices soaring
• US inflation will surge to 4.2% on energy shock, warns OECD
• Low US weekly unemployment claims indicate labor market stable
• US fixed 30-year mortgage rate jumps to six-month high as Iran war drags on
• US population growth falters as immigration falls
• Fed minions thinking about maybe cutting rates later in 2026, but are less likely to do so:
• Fed still set to cut US rates late this year, say economists, rejecting market pricing: Reuters poll
• Fed's Miran Says He Raised Rate Projection Due to Inflation Data
• Bigger trouble, stimulus developing in China:
• From beer to cosmetics, Asia feels full force of energy crisis
• Exclusive: China considers easing bank shareholding limits to boost capital
• BOJ minions excited to see higher inflation developing in Japan:
• https://www.reuters.com/world/asia-pacific/japans-corporate-service-inflation-perks-up-february-2026-03-26/
• ECB minions standing by to maybe change their perfect monetary policy:
• ECB ready to hike rates even if expected inflation surge is short-lived, Lagarde says
• ECB Would Need ‘Forceful’ Response if Inflation Surges, Says Lagarde
• Nasdaq dropped more than 2% as investors react to rising Middle East tensions
• Wall Street slides as Mideast de-escalation uncertainty weighs on sentiment
• Nasdaq confirms correction, Wall Street slumps on Middle East uncertainty

Friday, 27 March 2026

• Signs and portents for the U.S. economy:
• U.S. Oil Prices Surge Back Above $100 a Barrel
• Oil, gas exploration is back: Energy giants hunt to replenish reserves
• Fed minions worried about inflation arising from Iran war, even though their crystal ball is foggy:
• Fed's Jefferson: sustained higher energy prices could worsen inflation, spending outlook
• Fed's Paulson worried about war's impact on inflation expectations
• Fed's Barkin says 'fog' again obscuring economic outlook
• Fed's Cook says the balance of risks has shifted toward inflation due to Iran war
• Bigger trouble, stimulus developing in China:
• Chinese ships halt attempt to exit Hormuz despite Iran safe passage assurances
• China's largest banks' profits virtually flat as property slump continues
• China's industrial profits jump as Middle East war casts long shadow
• BOJ's former chief minion still excited about more interest rate hikes in Japan:
• Bank of Japan may raise rates by June as Iran war fuels inflation, its ex-top economist says
• Ex-BOJ chief Kuroda sees 3-4 more rate hikes to 1.5% in 2027, Asahi interview shows
• BOJ likely to warn of inflation whiplash from Iran war, ex-central bank executive says
• BOJ releases new natural rate estimate as part of communication drive
• ECB minions stay they're ready to keep standing by as long as they can before raising Eurozone interest rates:
• ECB should not be in a rush to raise rates, Schnabel says
• ECB should not rush to hike rates as baseline still holds, Patsalides says
• Dow tumbles almost 800 points and enters correction, S&P 500 posts fifth straight losing week
• Nasdaq plunged over 2% as Middle East tensions rattled Wall Street
• Stocks tumble, Dow confirms correction territory, as Middle East tensions drag

The Atlanta Fed's GDPNow tool forecast of real GDP growth in 2026-Q1 fell to +2.0%, declining from the +2.3% growth anticipated a week earlier.

The upcoming trading week will be short with the Good Friday market holiday on tap.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Federal Reserve official who is trying to see the future for inflation in a crystal ball that has fogged up".