“I think what we saw over the prior 27 days was just the first stage of a deeper correction.”

Market confidence in a short war was misplaced. This isn’t a time to be confident about the outcome.

A military conflict with Iran, a labor-linked affordability crisis and a tepid stock market have put the U.S. economy on uncertain footing in the first quarter of 2026.

As of this writing, WTI crude oil futures were up 10% to about $96 per barrel. The latest spike came after Iran attacked several ships in the Persian Gulf and the International Energy Agency (IEA) called it the “largest supply disruption” ever.

Despite some heavy selling since the start of the Iran conflict, the S&P 500 has remained within 5% of its latest record closing high from earlier this year. In fact, since the conflict began, the S&P 500 is down only about 1.

The S&P 500 fell 1.5% Thursday and returned to big swings following a couple days of relative calm. The Dow Jones Industrial Average dropped 1.6%, and the Nasdaq composite sank 1.8%. The center of action was again the oil market,

Many investors have been on edge for months, with concerns that an AI bubble or a weakening job market could lead to a recession. But now, amid increased political uncertainty and conflict abroad, fears about the stock market are amping up.

The risks of a market "meltdown" have climbed to 35%, Ed Yardeni said, as the Iran war raises the risk of stagflation hitting the economy.