U.S. stock investor ‘Fear & Greed Index' turns most bearish in 5 months

• The index fell from a 2026 high of 66 in early February to 26, with the Strait of Hormuz closure affecting 20% of global oil supply and causing significant price increases in oil and natural gas
• Arabian Peninsula states are reportedly considering canceling vast investments in North America to offset war costs, posing a dangerous outcome for the U.S. economy
• Market anxiety was already elevated before the conflict due to AI sector concerns, with major tech companies experiencing selloffs amid fears of a massive bubble driven by mismatches between capital expenditure and AI profitability

Summary: U.S. Stock Market Sentiment Reaches Five-Month Low Amid Geopolitical Turmoil

The CNN Fear & Greed Index dropped to 26 on March 9, 2026, marking the most bearish investor sentiment in five months and approaching "extreme fear" territory (below 25). This represents a dramatic decline from the 2026 high of 66 recorded in early February.

Key Drivers of Market Fear

Geopolitical Crisis: The primary catalyst is the U.S.-Israel military campaign against Iran, which began with joint airstrikes on February 28. The conflict has escalated significantly, with Iran launching retaliatory missile and drone attacks across the region, targeting countries hosting American military infrastructure.

Energy Supply Disruption: The Strait of Hormuz—responsible for 20% of global oil supply—has effectively closed due to the conflict, causing substantial increases in oil and natural gas prices. Brent crude oil has surged past $100 per barrel. This disruption particularly impacts Asian economies, especially China.

Economic Ramifications: Multiple Arabian Peninsula states are reportedly considering canceling substantial investments in North America to offset war costs, posing significant risks to the U.S. economy.

Political Volatility: Mixed messaging from President Trump and administration officials regarding war progress and objectives has contributed to market uncertainty.

Pre-Existing Concerns

Before the conflict, markets showed weakness due to AI sector concerns. Major technology companies experienced sell-offs amid fears of an AI bubble, driven by persistent mismatches between capital expenditures and AI profitability. This raised concerns about a potential market crash comparable to historical bubbles.

The index previously hit extreme lows of 5 in late November-early December 2025.