Market on the edge of a reversal or continued pressure

Today, March 31, 2026, is forming a rather nervous picture. On the one hand, futures on U.S. indices are showing growth, creating a sense that the market is trying to find a bottom and reverse. On the other hand, key fundamental factors suggest that this is more of a pause than the beginning of a new upward movement.

The main thing happening right now is a shift of the center of gravity. The market has temporarily stopped being “economic” and has become “geopolitical.” And this is always a more dangerous phase, because numbers and forecasts уступают место news and emotions.

U.S. futures are in the green, but this growth looks fragile. It is not supported by a sustainable improvement in macroeconomic expectations. Rather, it is a reaction to oversold conditions and an attempt by players to bounce in the short term. At the same time, oil is firmly holding above $110 per barrel, and Brent crude is trading around $113. This is no longer just growth – it is a signal of a structural supply-side problem.

The conflict around Iran continues to expand, and the key node of the entire situation is the Strait of Hormuz. Its partial blockage effectively changes the rules of the game in the global energy market. Even not a full closure, but the very threat of restrictions already leads to a sharp increase in the risk premium.

And here it is important to understand the main shift. The main driver of the market right now is not the Fed policy or even statements by Jerome Powell. Investors are temporarily ignoring monetary signals. In a normal situation, the market would analyze every word of the Fed, trying to guess the timing of rate cuts. Now this factor has moved to the background.

Even political signals, including statements by Donald Trump about a possible end to the conflict without opening Hormuz, do not provide relief to the market. The reason is that such a scenario itself implies a prolonged oil shortage. That is, the conflict may formally end, but its economic consequences will remain.

Oil is becoming the main indicator of what is happening. Before the escalation, it was around $70, which corresponded to a relatively balanced market. Now the level above $110 reflects not balance, but stress. And the growth potential remains, because any new restrictions on supply or logistics are instantly priced in.

Additional factors are increasing tension. Attacks on tankers have become more frequent, the likelihood of introducing paid or restricted passage through the strait is rising, and insurance premiums and logistics costs are increasing. All of this is not temporary spikes, but elements forming a long-term “risk premium.” As a result, oil is becoming more expensive not only due to shortage, but also due to the increasing complexity of the supply system itself.

Against this background, it becomes clearer why the stock market is not showing confident growth. Despite the positive in futures, indices such as the Nasdaq Composite and S&P 500 are already in correction. This indicates that investors do not believe in a quick and painless resolution of the current crisis.

Capital begins to move differently. Money gradually flows into defensive assets, as well as into sectors that benefit from the current situation. This is a classic market reaction to uncertainty – not a full exit, but a reallocation.

Today’s macro data plays a secondary but still important role. JOLTS job openings data in the U.S. provides insight into the labor market, while eurozone inflation data shapes expectations for rates in Europe. However, the key factor remains not the publication itself, but the reaction of the bond market. Bond yields are now becoming a kind of indicator of confidence in the current economic trajectory.

The main idea for an investor in such an environment is simple but unpleasant: the market is not about growth now, but about capital survival and its proper reallocation. Periods when “everything grows” are replaced by phases when it is more important not to lose than to earn.

Winners are energy companies, the commodities sector, and defensive industries. They either directly benefit from rising prices or have stable cash flows in unstable conditions. Under pressure are technology, small businesses, and all assets sensitive to the cost of money. High rates and expensive liquidity make them vulnerable.

Oil deserves special attention. If it stabilizes above the $110-115 range, it could trigger a new wave of inflation. In that case, expectations for rate cuts will be revised or even completely broken. And then the market risks getting a second wave of decline, not on expectations, but on real deterioration in financial conditions.

In the end, the market is living in a mode that can be described as “headline-driven.” Any news from the Middle East now has more impact than even important macroeconomic reports. This makes market movements sharp, unpredictable, and often illogical.

And the main practical conclusion here is as pragmatic as possible. In such periods, the winner is not the one who tries to guess the direction, but the one who knows how to manage risk. Because the market can be wrong, panic, or overestimate threats – but it almost never forgives excessive confidence.