Pillar Financial Market Updates
Market Update: Energy, Inflation, and Investing (March 2026)
We live in a world where information moves quickly. With ongoing conflict in Iran and rising energy prices, it’s natural to have concerns about the economy, interest rates, and markets. This update provides perspective on where we stand today and what we are monitoring as we continue to guide you.
Recent headlines have focused on rising oil prices, particularly diesel, along with higher-than-expected inflation. At the same time, these are not the only factors at play. If not for the current conflict, attention would likely be on early signs of stress in private credit markets and a gradual increase in unemployment. We are actively monitoring all of these areas.
Energy infrastructure has been targeted in past conflicts, most notably during the Gulf War when oil wells were destroyed at scale. While there are similarities, current attacks appear more focused on key production and processing facilities across multiple countries, which could lead to more prolonged supply disruptions if sustained.
The U.S. has relatively low direct reliance on oil flowing through the Strait of Hormuz, estimated around 2–3%. However, global markets are interconnected. As demand shifts globally, it impacts overall pricing, which is why energy costs are rising even with limited direct U.S. dependence.
Higher diesel prices impact transportation, shipping, agriculture, and construction. As costs rise, businesses often pass those costs on to consumers, contributing to inflation. If inflation remains elevated, the Federal Reserve may delay rate cuts, keeping financial conditions tighter for longer.
While this environment can create volatility, markets are forward-looking and tend to price in uncertainty quickly. Historically, geopolitical events have led to short-term swings, but long-term outcomes are driven by economic growth and earnings, not headlines.
Market movement remains within normal ranges. Intra-year declines are common, and not all areas of the market move in the same direction. Some sectors, such as energy and defense, are benefiting, while others have pulled back. Overall the U.S markets are down roughly 3-4% YTD, and 6-9% from recent highs.
Losses often feel more significant than gains, which can lead to emotional decisions. One of the most common reactions is believing “this time is different.” While every situation has unique elements, history consistently shows that reacting emotionally to short-term events can be more harmful than helpful.
We continue to monitor broader trends, including private credit conditions and the labor market. While still stable, early signs of softening are emerging. If unemployment rises meaningfully, it could impact consumer spending and economic growth. The U.S. unemployment rate rose slightly from 4.3% in January to 4.4% in February, according to the Bureau of Labor Statistics, and has remained relatively stable in the low-4% range.
Source: BLS Unemployment Rate Data (FRED/Federal Reserve)
The key takeaway is this: uncertainty is normal. Volatility is part of investing. Market recoveries often occur before conditions feel stable, which is why staying invested remains critical.
This does not mean avoiding adjustments altogether. It means avoiding reactionary decisions driven by emotion. A disciplined approach, focused on diversification, long-term planning, and measured adjustments, remains the most effective way to navigate environments like this.
We will continue to monitor energy markets, inflation, credit conditions, and employment trends closely. While current developments are important, they are just one part of a broader economic picture.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
1Q Market Update and Outlook 2026
As we start 2026, we are sharing a brief market update reflecting on 2025 and our outlook for the year ahead. A summary slide is included below for a quick read, with the full presentation attached for additional detail. We are reviewing our models and making selective rebalancing adjustments where appropriate. With tax season underway, we will notify you as your tax documents become available. As always, please reach out with any questions.
Click here to read the Update in its entirety > Q1 Market Update and 2026 Outlook
Thank you!
May 15, 2025 Market Update
It’s been quite the roller coaster over the past month. Times like these continue to prove the value of having a plan vs. the cost of letting our emotions get the best of us.
April 2025 will be remembered as Tariff month, and hopefully remind investors the importance of staying the course and avoiding market timing. The chart below shows the extreme volatility of the S&P 500 index from April 1st to May 13th.
It is our belief that the markets may remain volatile as pauses have been made on tariffs, for negotiation purposes. While uncertainty has calmed, we are not out of the woods yet.
Let’s recap what we just experienced:
1. April 2nd: The Trump Administration announces sweeping “Reciprocal tariffs” on all countries from 10% - 55% starting April 9th.
2. April 3rd – 8th: The S&P 500 drops over 12% over 3 days as trade uncertainty and investor panic hit its peak.
3. April 9th: 90 day pause announcement to all countries willing to negotiate or avoid retaliation by increasing their own tariffs. Market response with largest single day gain in history up 9.5% - 12.2% respectively.
4. April 10th – 21st: Markets drop due to China/U.S. strained relationship, increasing fears of global recession.
5. April 22nd – May 1st: Details emerge on progress in trade negotiations with some of our most important trading partners (India, Japan, Korea, and European Union) increasing likelihood we may see key trade deals in coming weeks.
6. May 2nd: S&P 500 officially turns positive from where it started a month prior.
7. May 12th: China announced a reduction in its blanket tariffs on American products, lowering then from 125% to 10% for 90 days.
The economy and markets will continue to evaluate and adjust as information comes in. We will continue to monitor the updates on future negotiations, the impact on increased tariffs, the impact it will have on inflation and how that will impact interest rates.
These past few weeks have been interesting to watch and see how quickly things can change, and how quickly our emotions can cloud our judgement as uncertainty and panic rise. While we still have a slowing economy and a Fed holding rates, the risks of a U.S. recession are less likely than where we stood just a few weeks ago. Hearing from China their willingness to negotiate and offer a 90 day pause on increased tariffs to the U.S. is a good sign. We still have a lot of work to do, but it does appear that most countries have been willing to talk and avoid proposed tariffs.
What lessons can be learned from these past weeks?
• Historically, markets tend to overreact to uncertainty.
• The above chart shows us a near perfect case study on the importance of sticking to the plan when things get scary.
• Historically, the largest positive days in the markets, have been right after the largest negative days in the market.
• The S&P 500 is just one of many investments we own in a diversified portfolio. Some are positive for the year, others still have ground to make up, but overall, diversified portfolios have experienced much less volatility than the S&P 500 due to this power of diversification.
• Many people panicked in April, selling their long-term investments. These investors have not only locked in losses that are difficult to get back but also put themselves through a great deal of stress and anxiety.
• Others stuck to their plan despite the fear, or best of all, weren’t paying much attention to begin with. This group won’t notice much of a difference between their March and April Statements, saving themselves a lot of stress in the process.
Ironically during this time one of the great investors of our time, Warren Buffett, announced his plans to step down as CEO of Berkshire Hathaway at the age of 94!
As Warren Buffett once said, “The stock market is a device for transferring money from the impatient to the patient.”
In the face of recent challenges, one investment principle remains clear: staying invested through periods of volatility has historically been important for long-term financial success. We're happy to revisit your long-term plan and refocus on the things we can control.
Periods like this are a great opportunity to put extra cash to work, make contributions to Roth IRAs and 401(k)’s, or otherwise take advantage of the market volatility for the long- term.
We appreciate the trust you put in us to manage your investments and financial plan. We're here anytime you need us, so please don’t hesitate to reach out if you need anything or just want to catch up for a review.
Sincerely,
Phillip
April 3, 2025 Market Update on Tariffs
The announcements made by the Trump administration on Wednesday are wreaking havoc on the markets. Risks have increased due to the fear rising prices combined with a slowing economy could be recessionary. The hyperfocus on tariffs by the public has investors extremely sensitive over the topic and we expect many to overreact when interpreting the data.
Pessimistic views create uncertainty, and with that comes larger swings in the markets until the outlook is clear. While we understand there are multiple scenarios that could occur, it’s important to not let your emotions get in the way of your investments and goals.
We rebalanced all client accounts in early February taking some gains off the table and redistributed them. I am going to do the same thing in the next few days as we start to shrug off these new rules and the markets start to adjust.
We anticipate retaliatory tariffs on the U.S. and hope negotiations will lead to tariff removals and better trade policies. These pullbacks are generally a great buying opportunity, like the pull back and dip during the Covid outbreak. If you remember, the markets rebounded once we learned covid cases where falling, or we were closer to a vaccine. Any hope of life getting back to normal created a jump in the markets. It will be no different today, except the topic has switched from Covid to tariffs. Any announcement that negotiations are underway, or the removal or elimination of any tariff, should create a bounce back in the markets.
Regardless, the volatility that exists today is a combination of uncertainty, fear and the unknown rules on how business will be affected in total. The markets will adjust, and our economy will learn to grow based on these new rules regardless of the outcome. The U.S. is the largest consumer in the world, countries rely on us as much as we rely on them. Looking at the negative trade balance, it’s evident we purchase more than we sell. Retaliation tariffs would be a normal reaction as other countries panic over one of their largest trade partners.
When Warren Buffett said, “Be fearful when others are greedy and be greedy when others are fearful,” he wasn’t just talking about investing. He championed contrarian thinking and urged people to capitalize when groupthink can result in emotional extremes.
How do you define an “emotional extreme?” Let’s look at how often people search for the term “tariff” on a popular search engine.
I don’t know if Warren would consider today’s hyperfocus on tariffs greedy or fearful, but I’m certain he would see it as extreme.
Tariffs can be both positive and negative, used to hopefully strengthen domestic companies to compete against foreign companies that may have lower labor costs. Or bring foreign companies to America to create jobs. Tariffs can also hurt domestic companies as they rely too strongly on those tariffs instead of creating innovative ways to compete globally. The new rules can hurt demand or affect parts that may come over seas costing more for the consumer. Economically as prices rise, it leaves less spending capabilities for consumers. This slows economic growth and can be recessionary. There are things that can be done to stimulate growth. Lowering interest rates is one of them. We have been waiting for an economic downturn to convince the Fed they can be more aggressive at cutting rates. If inflation doesn’t spike, we should see the Fed announcing larger rate cuts, to help offset these changes.
Dips and corrections are a normal part of investing. It’s ironic we all wish we could go back in time to buy at lower prices, but when dips occur and we experience 10-20% drops in stock prices, investors panic and wait for things to improve instead of buying low. It’s that fear that things could get worse, that distracts them from the buying opportunity.
There will always be a reason not to invest, it is the risk premium that rewards us for buying low. Eventually our economy and markets will shrug off the tariffs even if they do stay in place and re-group. We believe this is a buying opportunity for long term investors.
Our eyes will be focused on inflation data and the labor market. As companies deal with the increased costs associated with tariffs, this can affect the labor market. To keep margins steady, the easiest way for businesses to cut costs is to eliminate a portion of payroll. Unemployment may increase over the short term as companies adjust and prepare for the increase costs.
So, if you see stock prices continue to be volatile, remember today’s chart. It shows that people are searching for tariff information, so they may overreact when interpreting an update. Remain patient and remember why you are invested. In order to experience the positive returns our markets have provided over the years, we have to accept the pain that comes periodically.
Let us know if you have any questions or concerns. Don’t hesitate to call or send us a text. Texting is an easy way to ask quick questions and help reduce any stress that may be keeping you up at night. Our text number is 919-205-0201.
Sincerely, Phillip