Things rarely go exactly as we expect.
Consider this year’s NCAA Division 1 men’s basketball tournament. The term “March Madness” has certainly been applied this year. In fact, there were so many “upsets”, with lower-ranked teams beating higher-ranked teams, that there were only about 14,000 perfect brackets after the first round.
Of the 26-36 million men’s NCAA Tournaments that people filled out on major web platforms, almost all of them were broken in the second round after Tennessee defeated Virginia.
If this isn’t the perfect illustration of how difficult it is to guess everything correctly, I don’t know what is, guys.
Of course, this year, there was much more than just basketball upsets that made March a little “crazy.”
The month was full of distractions on Wall Street, which understandably worried many investors.
But the biggest event is the war in Iran.
The market certainly felt it. In March, the Dow Jones fell 5.4%, the S&P 500 fell 5.1%, and the Nasdaq fell 4.8% — and that’s even after Tuesday’s strong rebound at the end of the month.
This sharp rebound is important. It tells us that while geopolitical shocks can hit stocks hard in the short term, sentiment can reverse just as quickly when investors start to see the way forward.
For this reason, the real risk now is not limited to the volatility itself. It’s letting all the noise distract you from the much bigger story that’s quietly unfolding.
So, on the day Market 360I want to show you why the latest market madness in March may be temporary, why investors are already starting to look beyond the latest Iran headlines — and why some overlooked developments in Elon Musk’s orbit say a lot about where the future is headed.
Let’s dig deeper.
Distraction of the Great March: Iran
First, there is the conflict in Iran.
Tensions in the Middle East reached a tipping point at the beginning of March, as the United States and Israel launched coordinated attacks on Iranian nuclear facilities, military infrastructure, and leadership on February 28. The conflict has now reached its thirty-fourth day.
In response, Iran not only launched its missile strikes, but also decided to halt shipments in the Strait of Hormuz, which greatly affected global food and energy prices.
Not only that, but the market has also been struggling to keep up with developments as it continues to change.
You may remember that last week, President Trump suspended military action in Iran until April 6. Then, on Monday, Trump threatened to attack Iran’s critical energy resources and infrastructure if a deal was not reached and the Strait of Hormuz was not reopened.
But the tone has changed now.
On Tuesday and Wednesday, stocks rebounded strongly as hopes for a de-escalation increased, oil prices fell and President Trump signaled his willingness to end the conflict.
In other words, the situation remains fluid. But the market’s response is a reminder that headline-induced fear can quickly reverse when investors begin to sense a path off the beaten path.
While the recovery has been good, uncertainty remains high and energy prices are feeling tense.
Closing the Strait of Hormuz pushed West Texas Intermediate oil (West Texas Intermediate crude oil(And Brent crude reached $100 a barrel, despite retreating from their recent highs, as investors bet that the conflict may not continue indefinitely.
Even when a ceasefire is negotiated and the Strait of Hormuz is reopened, it will take months for energy shipments to resume to pre-war levels. About a third of the world’s seaborne fertilizer trade passes through the Strait of Hormuz, and the resulting shortage will keep global food prices high.
Therefore, food and energy price inflation is expected to continue for several months.
The problem of distractions and the bigger story…
Now, there are two problems with these deviations. The first is that it hinders US GDP growth.
Such geopolitical shocks could derail economic momentum. They can raise energy costs, dampen sentiment, and make it difficult for companies — and investors — to plan with confidence.
The Atlanta Fed has already lowered its first-quarter GDP estimate to an annualized pace of 2.0%, down from 2.8% on March 18 and 3.2% on March 5.
So, you’re probably wondering what happened to my 5% GDP growth forecast this year. (I predicted this in early January, and even in the middle of the month, The signs were that it would happen.)
I continue to believe that the US economy has the potential to meaningfully re-accelerate once this latest wave of uncertainty fades. But in the short term, wars, energy shocks, and Washington drama could get in the way.
The second problem is how all of this complicates the path toward lower interest rates.
Two weeks ago, the Federal Open Market Committee (FOMC) voted 11-1 to keep the target range for the federal funds rate unchanged at 3.5%-3.75%. Clearly, rising energy prices, inflation fears, and geopolitical concerns played a role in the FOMC’s decision.
In fact, rather than saying that war-related inflation would be temporary, the FOMC chose to say: “The consequences of developments in the Middle East for the US economy are uncertain.”
By now, you probably know that the Federal Reserve and other global central banks like to ignore food and energy inflation. Their preferred inflation indicator is core personal consumption expenditures (PCE), which excludes food and energy. We’ll take a look at that next Thursday.
Despite the food and energy inflation caused by the closure of the Strait of Hormuz, I expect global central banks to cut key interest rates in the coming months to stimulate their economies. The Fed should join the parade of cutting global interest rates in May, when Kevin Warsh takes over as the new Fed chairman.
Once key interest rate cuts begin and uncertainty fades, annual GDP growth of 5% should be achieved in the second quarter.
Don’t head to the bench
Now, it’s clear that the recent aberrations have prompted many investors to call a “timeout” and head to the sidelines.
But I want to urge you to resist this impulse.
One thing I’ve learned during my decades on Wall Street is that you have to keep your head in the game. The second is that it pays to be optimistic.
For example, while Wall Street has been glued to every new development coming out of Iran, there is one story that reminds us of the bigger picture.
Yesterday, SpaceX filed confidential paperwork for an initial public offering (IPO). Some estimates put the company’s value at $1.5 trillion, making it the largest initial public offering in history.
Think about what that means. Even as war headlines dominate the news, the American innovation machine is still moving forward.
Which It’s the bigger story.
What you can do to make a profit
I remain convinced that 2026 will be one of our best performing years in decades!
Because the reason behind these recent fluctuations is temporary, and it distracts investors from the source of real growth.
Just look at What Elon Musk intended to doFor example.
Between xAI, SpaceX, and the broader buildout now unfolding around AI, data centers, and next-generation infrastructure, it’s clear the world’s biggest players aren’t pulling away. They are accelerating.
That’s why I think investors should pay close attention to what Elon Musk is moving right now…
Between xAI, SpaceX, and the broader infrastructure boom unfolding around AI, I think its recent moves point to where some of the biggest opportunities may emerge in 2026.
That’s why I put it together recently Special offer Explaining what’s driving this shift, why Wall Street is still underestimating it, and which companies I believe are positioned to profit the most as it unfolds.
You can watch the full show here.
sincerely,
Louis Navellier
editor, Market 360
