YTD: Inflation (Oil) Up, Stocks Down. Are We Near Max Pain?

So, investors, it’s been a long week. It seemed to be more of the rinse and repeat, so I’m going to do a bit of a recap.  I’m going to cover equities, bonds, inflation, geopolitics, and the ongoing AI transition — with a focus on what is mattering for your portfolio.

The Bottom line remains, the S&P 500 peaked early November last year and has gone nowhere overall.

Markets have been pausing and consolidating— not breaking —but the inflation pressure our team saw to start the year is building, oil and energy markets have been the recent reason.

1) U.S. EQUITIES

Let’s start with stocks Last week March 6th through March 13^th was a broadly down week..it’s third down week in a row.

• S&P 500: >-1.5%
• Dow Jones Industrial Average: >-2.25%
• Nasdaq Composite: about -1.25%

So — year to date:

January 1st through March 13th

• S&P 500: about -2.5%%
• Dow: about -3%
• Nasdaq: about -4%

Not great but not horrible given rising concerns of slowing growth and higher inflation

What does this sloppy action for 5 months tell us?

It says to me digestion so far, not a downtrend. It’s pretty normal behavior after a v-bottom like April 2025 but it’s not enjoyable at all.

We have been and remain in a sideways, rotational market for almost 6 months.

What drove the week:

First — inflation data came in higher than most expected and that’s before Iran conflict and that pushed rate cut expectations further out.

Second — oil prices surged, driven by escalating tensions in the Middle East that have extended beyond Iran.

Third — rotation continued. Money moved out of mega-cap growth and into energy, healthcare, and income stocks

Our Takeaway so far is this is classic mid-cycle consolidation. Call it the 6-7^th inning stretch. Not a selloff. A reset, so far.

2) BONDS & INTEREST RATES

Now to bonds and fixed income. And unfortunately, as it has most of 2026, The bond market continues to send a very clear message: Rates are likely staying higher for longer because inflation is higher than wanted.

What we saw last week in fixed income was

• Treasury yields remained elevated because of the inflation component not the growth component
• Volatility in rates increased a lot into the weekend and
• Markets pushed out timing of Federal reserve cuts

Why it matters:

Higher yields create competition for equities, and they also tighten financial conditions.  Both stocks and bonds don’t like higher trending inflation.

As we have for most of 2026, I want to connect inflation and growth.

Currently, Inflation is sticky and Growth has been slowing in 1^st quarter, but investors, it’s still positive growth!

What’s driving inflation concerns much higher the last two weeks is energy input costs re-accelerating creating the risk that If oil stays elevated…the move in inflation is beyond its normal seasonal uptick and we move from slowing inflation → Re-inflation

Growth side:

• Consumer spending is holding up reasonably well at the high end but it’s not great in middle incomes and deteriorating quickly in lower income levels while labor markets are slowing.
• So far, there are signs of a slowdown but it’s not a sharp one yet.

For now, this is a softening environment, but it is becoming more fragile with the Iran conflict being a huge swing factor.

The Iran and broader Middle East situation is now directly impacting markets with Increased attacks beyond Iran, impacting global energy infrastructure and Rising tension across the region have driven Oil above $100 per barrel and hurt fertilizer pricing.

The financial markets care about this now because this is pushing up inflation pressure in real time. How?  Higher oil leads to:

• higher transportation costs
• higher goods prices
• rising inflation expectations

So far, most Markets have been resilient. Because the assumption is it’s a Contained conflict, not global escalation. But risk is rising and if this expands the consequences are

• Inflation moves higher
• Fed stays restrictive longer
• Equities face pressure as PE’s contract usually.

Let’s shift away from Geopolitics to something I’m more comfortable talking about and analyzing more a long-term driver of our economy: AI.

The markets are moving from: AI enthusiasm for everything AI to AI accountability

Markets are now asking:

• Where are the earnings?
• Where is the productivity gain?
• What companies capture the value? Who has a better or worse marginal ROIC

The OHFG team is seeing:

• Continued heavy investment in AI infrastructure
• Strong demand for compute and power
• Early signs of productivity impact as some of our investments

AI remains a multi-year structural theme.

But right now, expectations are being tempered.

For now, what matters most?:

• Oil prices and their effects on Inflation trajectory
• Federal reserve policy timing
• 2^nd and 3^rd quarter earnings and revenue expectation being achievable

For now, investors should Stay balanced but Maintain growth exposure as its one of the few assets that historically outearn and out return inflation.
Final thought:

This is not a fragile market. But it is a sensitive market. And sensitive markets react quickly to new information.

BOTTOM LINE

• Markets are consolidating. Inflation is the constraint. Geopolitics is the swing factor.AI is the long-term driver

Oak Harvests’ guidance remains consistent:

• Stay disciplined. Stay diversified. Stay focused on long-term objectives.
• We’ll continue monitoring these risk and positioning accordingly.
• Whether your priority is growth, income, or a combination of both, our team is here to help you plan for your family’s financial future, no matter where you are in your career or retirement journey.