Why Aren’t Stocks Lower? Stock Talk Update, Friday March 27, 2026

Many Investors Are asking Why Aren’t Stocks Down More this year?

War in Iran? Geopolitical strife in virtually every region of the world?

It’s a fair question.

We’ve had geopolitical tension.
We’ve had an energy shock tied to the Iran situation.
We’ve seen volatility spike to near 30 on the Vix.

And yet—the S&P 500 is holding up far better than many investors expected, down about -5% YTD and , -7% off ATH’s.  So far a pretty ordinary pullback after the type of run we had from April 3-5^th bottom into Halloween last year.

So today, I want to walk you through three key reasons why the market has been more resilient than it “feels.”  And more importantly—what that means for investors, especially those in or near retirement.

1. Energy Is No Longer as big a Major Consumer Shock

Let’s start with energy. Historically, spikes in oil and gasoline prices have been one of the fastest ways to slow down the U.S. economy—and the stock market. But there is a key difference today.

Energy costs don’t take up as much of the household budget as it used to.

Let’s look at the data.

Back in the late 1970s energy products made up over 6% of U.S. household consumption. That was a major burden.

When energy prices spiked, consumers had to cut spending elsewhere.
And that slowed economic growth quickly. Now compare that to the last decade.

For the last decade, energy has averaged closer to 2% of household consumption.

That’s a dramatic shift. Let’s take a look at the data, here’s a chart from Barclays.

[What this means is that even when energy prices rise today, the impact on overall consumer spending is much smaller than it was in past decades.

This matters because:

• Consumer spending drives close to 70%+ of the U.S. economy
• And ultimately, that spending is a big driver of corporate earnings

So yes, energy prices have moved higher, and quite fast.But the economic shock, so far, is far more muted than it would have been 30 or 40 years ago.

That’s one major reason stocks haven’t fallen as much as many expected.

2. Earnings Growth Is Still Strong—and Accelerating

The second—and we think the most important factor is earnings.

At the end of the day, stocks follow profits.And right now, profit expectations are not weakening. In fact. They’re improving. Let’s walk through the current outlook once again.

According to recent estimates,from Factset as well as analysis highlighted by Morgan Stanley, the S&P 500 is expected to see strong earnings growth in 2026, even with ongoing geopolitical risks. By strong, we are looking at mid-teens growth for 2-3q 2026.

Here’s the key point:

• Earnings growth is not just positive, it is expected to accelerate as the year progresses

That’s critical. Early estimates suggest:

• Low double-digit growth in the first quarter
• Accelerating into the mid-teens by the middle of the year
• And potentially staying elevated into the second half

This is not what you typically see ahead of a major market declines.

We’ve covered this before but historically:

• Markets tend to peak when earnings growth is slowing
• Not when earnings growth is accelerating
• Historically, markets don’t anticipate earnings tops like they do at market bottoms.

Let me say that again, because it’s important.

Markets rarely break down when profits are improving.

They break down when profits have peaked or are deteriorating.

So what investors are experiencing today is

• Negative headlines
• Geopolitical uncertainty
• Short-term volatility

But underneath the surface, corporate earnings expectations are holding up—and in many cases, moving higher.

That creates a strong fundamental floor under the market.

So even when stocks pull back, buyers step in.

Because from a long-term perspective, earnings still support higher prices at these interest rate levels.

3. Monetary Policy Could Turn More Supportive

The third factor is monetary policy.

And this one is especially important looking forward.

Right now, investors are focused on inflation, rates, and the Federal Reserve. Particularly what Chairmen Powell said a week ago.

But the potential for a new Federal Reserve chair—Kevin Warsh doesn’t seem priced in to the market. With Warsh comes the possibility, and I do mean possibility, of a more flexible and potentially looser monetary policy stance.  One that’s less data driven and one that might be more intuitive.

To be clear. The Fed is still focused on inflation. Which I think disregards the slower job market, but investors this leadership change mattes.

Historically, new Fed chairs often bring:

• A shift in communication
• A shift in policy priorities
• And sometimes a shift toward supporting economic growth

Markets are forward-looking.

They don’t wait for policy changes to happen. They begin to price in the possibility ahead of time. So even if current rates are stuck waiting today, or if they are pricing out future rate cuts, the new chairman might bring:

• Easier financial conditions
• More flexibility from the Fed
• And potentially lower real rates over time

That would be supportive for:

• Equity valuations
• Risk assets
• And overall investor sentiment versus the last month of Federal Reserve angst

So, when you combine: Stable-to-improving earnings, reduced sensitivity to energy shocks, and the potential for more accommodative policy later in the year, you get a market that is more resilient than headlines would suggest.

So why aren’t stocks down more this year?

There are three key reasons:

First, energy is a much smaller part of household spending today.
So rising prices don’t hit the economy as hard.

Second, earnings growth remains strong—and is expected to accelerate.
That provides fundamental support for stock prices.

Third, monetary policy could become more flexible, especially with new Fed leadership.
And markets are already beginning to anticipate that.

What This Means for Investors

For investors, especially retirees and those nearing retirement, the takeaway is not to ignore risk. Volatility is still here. And headlines will continue to drive short-term market moves. But it’s important to separate:

• Short-term noise
  from
• Long-term fundamentals

Right now, the fundamentals remain more supportive than many people realize. That doesn’t mean markets go straight up as They rarely do. We’ve covered the normal historical and frequency of market declines in past videos. But it does mean that periods of uncertainty, like the one we’re in now, can create opportunities, not just risks.

Closing

For now, 2026 has been a sloppy, choppy mess for the S&P 500.

YTD, we are navigating slower growth, higher war driven inflation, and higher base Volatility in markets

Our advice remains consistent: Stay disciplined. Stay diversified. Stay focused on long-term objectives. We’ll continue monitoring these structural risks — 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.