Let me begin with yet another quote from Rudyard Kipling. In advising calmness and resilience in uncertain times, he offered this. “Keep your head about you when all others are losing theirs.” A fine idea, especially when you’re being subject to highly overwrought, sensational comments and opinions…many of which contain only a modicum of fact, at best.
I have a few words to offer about the oil stuff but let me start with something much more important – what’s going on within the stock market itself.
Market notes
The day this piece was written was the 17th anniversary of the market's bottoming in 2009, with the S&P at 676. Remember? That period was going to be the end of life as we knew it. But, in fact, the markets have really never looked back since. By the way, the S&P closed today at 6795, which is lots more than 676.
The tsunami of selling over these prior couple days was, to a great extent, caused by a whole lot of short-term traders who found themselves on the wrong side of the oil news. Please do not ever use their responses to guide your investment decisions. Not a good idea.
Here’s a big one to consider. Price doesn’t follow the headlines. Very conspicuous by its absence has been any financial media comment about how steady the S&P500 has been. It hasn’t whipped all over the place, as the financial media might imply. In fact, since year-end, as of today’s close, the Index is down just 1%. Not a misprint.
The S&P 500 today was still trading above its rising 200-day moving average. The moving average is one of the most widely followed gauges of the market's primary trend. It tracks whether more stocks are pushing to new highs or slipping to new lows over time. That trend measure has been pointing higher for the past 210 trading days – 42 market weeks.
In other words, the market has spent nearly a full year with the long-term trend moving in the same direction.
Trend tells you the direction of the market. Breadth tells you how many stocks are actually participating in that move – up or down. Right now, breadth is still expanding...a good thing.
Price consolidation with expanding breadth is usually a constructive combination. It suggests the market is digesting gains rather than losing internal strength.
The sideways movement over these past few months looks a lot less like weakness and more like that consolidation. The number of stocks pushing to new highs continues to grow beneath the surface.
As you may have heard, markets rarely move in straight lines. Even strong bull markets need periods where price moves sideways while trends catch up underneath.
So even though the S&P 500 has been moving sideways at the index level, participation of individual companies is still building underneath.
Right now, the headlines are screaming, and the end of the world narratives are everywhere. But when you step back and compare notes across different sources, the message is more balanced.
The primary trend remains higher. Market breadth is still expanding beneath the surface. Risk appetite has cooled some, but it hasn't broken.
That combination does not describe a market that is under stress.
It describes a market that is digesting gains inside a broader uptrend.
Oil thoughts
Further reinforcing the fact that the traders were behind the oil price moves came today, as the price dropped from $119 a barrel to about $87. Energy costs rising as fast as we saw in the previous couple of sessions would certainly have an effect on companies, households, inflation, and the economy…if it continued.
The war has caused some volatility in the markets, but probably not as much as you would expect. As noted, the S&P 500 is down just 1% from year-end 2025.
But, wait. Based on what the financial media says or implies, shouldn’t rising oil prices have a bigger effect on the stock market than this? Oil prices today remain well below the spikes in 2022, when sanctions and broader blowback from Russia’s invasion disrupted global supply and sparked fears of severe shortages. Those fears didn’t come true. Neither did a global recession. Oil spending much of the year over $100/barrel did not crush output or consumer demand. Contrary to what the talking heads don’t seem to grasp, we're not still in the 1970s. That global economy was more energy-intensive and the Middle East was a major production swing factor. Growth is much more energy-efficient now, while global energy production is broader.
If you look at the historical relationship between oil prices and stock prices, the reaction to this energy price spike isn’t quite so surprising.
What happens after oil jumps 5% or more two days in a row? It says here that since 1990, most of the time stocks are higher 1, 3, 6 and 12 months later1.
If this oil price hike is transitory, the effect on the stock market will likely be minimal.
If the war lasts longer than anticipated…it’s possible you’ll get a chance to buy lower.
Over the past 40 years, you might not believe this, but average market returns were actually higher when oil prices rose than when they fell in a given year. Since 1986, the average annual return for the S&P has been 13%. With oil prices down, the return is 11.3%1. Not too bad either way.
Summary
Amid all this, there’s one pattern that has stood the test of time: stocks will go down a lot, but then they’ll go up a lot more. You can look it up.
As all the historical data teaches us, sell-offs are what stock market investing is all about. The path to long-term riches in the stock market is riddled with volatility.
It’s why smart people agree that having time in the market beats timing the market.
That said, it’s OK to have emotions. Just don’t let them anywhere near your stock portfolio.
The way you and I experience the economy certainly matters for us.
But that won’t always provide a reliable signal for what’s going on in aggregate.
The macroeconomy is made up of many microeconomic stories, many of which are moving in opposite directions. That means your or my story won’t always align with the bigger story that’s moving markets.
Every major sell-off in history has been accompanied by a mix of economic concerns, monetary policy shifts, geopolitical tensions, or some other source of consternation that might make a rational person demand a higher premium for putting their capital at risk. The details are different each time.
Right now, the headlines are screaming, and the end of the world stories are everywhere. But when you step back and compare notes across different sources, the message is more balanced.
The primary market trend remains higher. Market breadth is still expanding beneath the surface. Risk appetite has cooled, but it hasn't broken.
That combination does not describe a market that is under stress.
It describes a market that is digesting gains inside a broader uptrend…
Please email me with your comments, questions or concerns.
All my best,
Michael J. Maehl
Senior Vice President
Retirement Income Specialist
Source: 1Ben Carlson “How Do Higher Oil Prices Impact Stock Market Returns?”
https://awealthofcommonsense.com/2026/03/how-do-higher-oil-prices-impact-stock-market-returns/