By Christine Idzelis
The S&P 500 has tumbled 7.4% so far in March
The U.S. stock market is slumping as the Iran conflict remains unresolved.
President Donald Trump has a reputation for trying to curry favor with investors. But on Friday, some Wall Street strategists were wondering if he might be losing his grip on the market.
U.S. stocks tumbled, with the S&P 500 SPX booking a fifth straight week in the red. The index hadn’t fallen for five straight weeks since May 2022, when it tallied seven in a row, according to FactSet data.
Investors’ belief in Trump’s eagerness to de-escalate the Iran conflict has kept the stock market from even larger losses in March, Steve Sosnick, chief strategist at Interactive Brokers, told MarketWatch. Still, as the conflict drags on, some have started to worry there’s no end in sight.
“Psychologically, it’s draining,” said Carol Schleif, chief market strategist at BMO Wealth Management, in a phone interview Friday. “Markets are grappling with the fact that they expected this to be over on short order.”
Recently, some have even begun to wonder whether Trump’s ability to reassure investors by telling them what they want to hear might be starting to wane.
Markets this week have been whipsawed by developments surrounding the Iran conflict, with investors at times encouraged by progress toward ending the fighting yet unable to shake off worries about Iran blockading the shipment of oil and gas through the Strait of Hormuz.
“The risk is that constant flip-flopping and headline fatigue is starting to seriously undermine the efficacy of the ‘Trump put,’ ” Barclays analysts said in an equity research note Friday. “The situation remains fluid and rather confusing.”
The so-called Trump put in markets refers to a president’s – or, in the past, a Fed chair’s – capacity to help spur a recovery by signaling a shift in policy, as seen in the epic rebound in stocks last year after Trump put on pause his steep ‘liberation day’ tariffs.
“Trump appears to be losing his grip on the markets,” said Fawad Razaqzada, a market analyst at StoneX, in a note Friday. “Investors no longer seem to take his statements at face value – if anything, they’re beginning to trade against them, waiting for tangible proof before reacting.”
When reached for comment, White House spokesman Kush Desai said in a statement that “the President continues to be a powerful force driving the market’s confidence in the United States as the most dynamic, pro-business economy in the world.”
“Trillions in investments are pouring into America and foreign holdings of dollar-denominated assets are at record highs because of President Trump’s commonsense agenda of tax cuts, rapid deregulationand energy abundance,” Desai added. “Once the military objectives of Operation Epic Fury have been achieved and the market’s short-term disruptions are behind us, everyday investors are set to reap a windfall in a booming American economy.”
Oil prices remained elevated as the fighting in the Middle East continued, with West Texas Intermediate crude (CL00) trading above $101 a barrel at the close of the Friday session.
“Meanwhile, the war goes on, and the longer the oil shock, the more severe the stagflationary shock,” the Barclays analysts said. “Iran does not seem to be in a rush to obey, Israel has intensified its strikes, and the U.S. is reportedly sending more troops in the region.”
See related: $120-a-barrel oil may be a tipping point that shifts Fed’s focus from high inflation to recession threat
Trump still appears responsive to pressure from markets. His Thursday announcement of the latest extension to his ultimatum to Iran occurred just after the S&P 500 registered its biggest daily drop since the start of the conflict.
“Panic in oil, rates and equities was palpable” in markets on Monday before Trump extended to Friday the 48-hour ultimatum he had set to Iran to reopen the Strait of Hormuz, the Barclays analysts said. “After another day of market stress” on Thursday, they said, that ultimatum was “delayed further to April 6.”
On Friday, the S&P 500 ended a sharp 1.7% lower, while the Dow Jones Industrial Average DJIA also fell 1.7% to land in correction territory. The Nasdaq Composite COMP slumped more than 2%, after entering a correction on Thursday. The S&P 500 deepened its March drop to 7.4%, according to FactSet data.
The U.S. stock market’s so-called fear gauge, the Cboe Volatility Index VIX, jumped Friday above 31 – well above its long-run average of around 20, FactSet data showed.
Markets want to see a framework for stabilization in the Middle East, with the Strait of Hormuz reopened to crucial tanker traffic, according to BMO’s Schleif. “The market wants to move beyond this,” she said.
Joseph Adinolfi contributed.
-Christine Idzelis
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03-27-26 1918ET
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