March was dominated by the U.S.-Israeli military strikes on Iran and the subsequent closure of the Strait of Hormuz, which together represent the most significant disruption to global energy supply in decades. Oil surged past $100 per barrel for the first time in four years, pushing the national average for a gallon of gasoline up over one dollar in a single month to above $4.00*. Equity and bond markets sold off in tandem, a dynamic we last experienced in 2022 as investors showed concern about the length of the conflict and the impact on the underlying economy. The Federal Reserve held rates steady at its March meeting, raising its inflation outlook while acknowledging elevated uncertainty. Chair Powell was notably candid, remarking that if there were ever a time to skip the economic projections, “this would be a good one because we just don’t know.”
One signal we find particularly instructive about the potential duration and severity of the disruption is the shape of the oil futures curve. While spot prices have surged to over $100 per barrel, prices at roughly four months forward decline sharply, and by year-end Brent futures are priced closer to $75-80**. This condition, known as backwardation, signals that the market views the current disruption as acute but temporary. The steep backwardation is consistent with what we have observed during prior sudden energy shocks; they tend to be sharp but relatively short-lived as supply adjusts and geopolitical conditions stabilize. While we acknowledge that meaningful damage to regional energy infrastructure will take time to repair and the situation remains fluid, the futures curve provides a degree of reassurance that the market expects a path toward normalization.
As the energy shock fades, as the futures market suggests it will, we believe attention will shift back to the labor market, which in our view represents the more important variable for the medium-term economic outlook. Hiring has remained muted, unemployment has drifted modestly higher to around 4.4%***, and the white-collar disruption driven by artificial intelligence that we discussed in prior commentary continues to build. We believe that as the dust settles from the geopolitical shock, the health of the labor market and its implications for consumer spending will reassert itself as the primary driver of both monetary policy and market direction. We continue to favor large-cap equities over their smaller counterparts given the ability of larger, well-capitalized companies to navigate uncertain operating environments, and we maintain our preference for credit risk over duration risk on the fixed income side. As we have emphasized throughout, volatility is not something to fear but something to plan for, and periods like March reinforce the importance of staying disciplined and focused on long-term objectives.
* “Gas Prices.” AAA Fuel Prices, American Automobile Association,
https://gasprices.aaa.com/. Accessed 1 Apr. 2026.
** “S&P GSCI Crude Oil.” S&P Dow Jones Indices, S&P Global,
https://www.spglobal.com/spdji/en/indices/commodities/sp-gsci-crude-oil-12-month-forward/#overview. Accessed 1 Apr. 2026.
*** “Civilian Unemployment Rate.” U.S. Bureau of Labor Statistics,
https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm. Accessed 1 Apr. 2026.
Information in this commentary is gleaned from third-party sources, and while believed to be reliable, is not independently verified. This content is not intended to be tax, legal, investment, or fiduciary advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Bernardo Wealth Planning recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. Past performance does not guarantee future results.