Over the last month, markets have been turbulent amid escalating tensions in Iran, with the VIX currently sitting around 25. For historical context, the VIX spiked above 50 during last year’s “Liberation Day” volatility and exceeded 80 during the COVID selloff, while it typically trades in the 15–25 range. The VIX, often referred to as Wall Street’s “fear gauge”, measures the market’s expectation of 30-day forward looking volatility in the S&P 500. In simple terms, it reflects investor anxiety around market risk. A reading around 25 suggests that, while there is some concern, investors are not pricing in a prolonged or severe disruption, in part because the broader economic backdrop remains resilient.
On the economic front, data continues to come in constructive. The Dallas Fed Weekly Index, which provides a more real-time view of U.S. economic activity than quarterly GDP, has been trending upward and is firmly in positive territory at 2.9, consistent with continued economic expansion. Industrial production has improved in early 2026, and consumer spending has remained steady despite elevated prices and softer consumer confidence readings. Additionally, ISM Manufacturing PMI came in at 52.7 for March, signaling expansion, as readings above 50 indicate growth in manufacturing activity.
The labor market also remains on solid footing. The unemployment rate ticked up slightly to 4.4% in February but remains below its November peak and well within what we would consider a healthy range. For perspective, the long-term 30-year average unemployment rate is closer to 5.5%. While job creation has moderated and plateaued through the first quarter of 2026, layoffs have not meaningfully increased, resulting in a relatively balanced and stable employment environment.
As we look ahead, periods of geopolitical tension and market volatility are inevitable. Our focus remains on cutting through the noise while staying grounded in long-term fundamentals. We continue to take a disciplined approach, positioning portfolios to navigate uncertainty while capitalizing on opportunities as they arise, with the goal of making thoughtful, long-term investment decisions on behalf of our clients.
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