Market Wrap

• VIX at 25 indicates elevated but not extreme fear, well below the 50+ levels seen during 'Liberation Day' volatility in 2025 and 80+ during COVID selloff
• Economic indicators remain constructive: Dallas Fed Weekly Index at 2.9, ISM Manufacturing PMI at 52.7 (above 50 expansion threshold), and unemployment at 4.4% versus 5.5% long-term average
• Industrial production improved in early 2026 and consumer spending stayed steady despite elevated prices, with job market showing stability as layoffs have not meaningfully increased

Market Wrap Summary

Market Volatility and Geopolitical Tensions

Markets have experienced turbulence over the past month due to escalating tensions in Iran, pushing the VIX to approximately 25. For context, the VIX spiked above 50 during last year's "Liberation Day" volatility and exceeded 80 during the COVID selloff, though it typically trades in the 15-25 range. The current reading suggests moderate investor concern, with market participants not pricing in prolonged or severe disruptions.

Economic Indicators Show Resilience

Despite geopolitical uncertainty, economic data remains constructive:

• The Dallas Fed Weekly Index stands at 2.9, indicating continued economic expansion
• ISM Manufacturing PMI reached 52.7 in March, signaling growth (readings above 50 indicate expansion)
• Industrial production has improved in early 2026
• Consumer spending remains steady despite elevated prices and softer confidence readings

Labor Market Stability

The employment picture remains healthy, with the unemployment rate at 4.4% in February—slightly elevated but below November's peak and well under the 30-year average of 5.5%. Job creation has moderated and plateaued through Q1 2026, but layoffs have not meaningfully increased, resulting in a balanced employment environment.

Market Implications

The combination of moderate volatility, solid economic fundamentals, and stable labor markets suggests resilience in the broader economic backdrop. Nottingham Advisors emphasizes maintaining a disciplined, long-term investment approach focused on fundamentals rather than reacting to short-term noise, positioning portfolios to navigate uncertainty while capitalizing on emerging opportunities.