How stocks, war and oil are entwined 🛢️

We’re only three months into 2026, but it has already been a rollercoaster for the major stock indexes, and there’s a good chance the ride isn’t over yet.

The Dow Jones Industrial Average fell just over 10% between its peak on Feb. 10 and its trough on Mar. 27. The Nasdaq 100 index fell by nearly 12% between its Jan. 28 peak and its Mar. 30 trough, meaning that both indexes have technically experienced a stock market correction. 

The S&P 500 index has narrowly avoided the 10% loss that defines a correction, as it fell slightly more than 9% between its peak on Feb. 2 and its trough on Mar. 30.

But in the last couple of days, the trend has reversed, with the Dow rising more than 3%, the S&P 500 rising nearly 4%, and the Nasdaq rising nearly 5%.

What’s behind the wild volatility? In three words: The Iran war.

Here’s what’s going on, and what to expect going forward. (Spoiler alert: there’s a chance the recent recovery could be short-lived.) 

In early March, the Iranian government closed the Strait of Hormuz to commercial ship traffic, as a retaliatory measure against the U.S. and Israeli airstrikes against Iran that began in late February.

The Strait of Hormuz is a narrow waterway that connects the Persian Gulf to the ocean, making it a chokepoint for oil exports from Iran, Iraq, Kuwait, Saudi Arabia, the United Arab Emirates and several other oil-exporting countries. In 2025, about one-third of the total worldwide oil trade passed through the strait.

Its closure represents a huge disruption to global oil supplies, and has driven the price of a barrel of oil, as measured by the Brent Crude price index, above $100 per barrel, up from less than $70 before the war. 

That, in turn, poses a risk of a broad rise in overall consumer price levels, given how important oil is to so much of modern life. Gas prices across the U.S. have already jumped on the news.

And that threat of higher inflation poses yet another risk to the market. Remember how the Federal Reserve has been slowly working to lower interest rates over the last few months? This war — as well as the oil supply disruption and the prospect of higher prices throughout the economy — throws a wrench into that. 

The Chicago Mercantile Exchange’s FedWatch tool, which uses data from interest rate futures markets to gauge the probability of different interest rate changes, shows that the Fed will probably keep rates steady at its end-of-April meeting, but it now shows a tiny chance the Fed will raise rates rather than a small chance of a cut. 

(In the days after the strait was closed, it showed a substantial chance of a rate increase, but this chance has decreased over the course of March.)

If a rate hike were to happen, it would increase the cost of borrowing throughout the economy, further hitting companies’ bottom lines.

In the last few days, things have reversed somewhat on reports that Iran and the Trump administration may be open to negotiations on some kind of ceasefire. The accuracy of those reports has been questioned, but oil prices and Fed rate hike probabilities have receded slightly as a result of them, and stocks have rebounded slightly. 

For now, the global market price of a barrel of oil is still around $100 per barrel. Oil has crossed the triple-digit mark three times in the past: 

There are a couple of conclusions we can draw from these historical oil price spikes: 

To be honest, I have no idea. As I often like to remind my readers, I’m just a guy who writes an investment newsletter, and my expertise in other domains is limited. I have nowhere near enough knowledge of international diplomacy or military science to make any coherent predictions on how or when this conflict will end. 

However, I do think there are a few caveats to keep in mind about the market’s recent optimism: 

With all this in mind, we can’t count out the possibility that hopes for a speedy resolution to this conflict could fall through in the coming days or weeks, in which case markets could crash again, based on market reactions thus far.

But no matter what happens, it’s worth remembering that financial advisors generally caution investors against trying to react to news-related market volatility. For long-term investors, market declines like those of the last month rarely make much of a difference on long-term returns, and can even lower your cost basis if you stay invested and keep buying through them.

It’s only natural to get skittish when the markets swoon — and if you want to take your hands off the wheel of your portfolio, a robo-advisor or human financial advisor may be something to consider. If you’re in the market for one of those, NerdWallet’s Best Robo-Advisors roundup and Best Financial Advisors roundup are good places to start. 

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If you’re still working on your taxes, you might think there’s no way to reduce your taxable income for 2025. After all, the year ended three months ago. 

But you’d be wrong. 

Several types of tax-advantaged accounts, including individual retirement arrangements (IRAs), health savings accounts (HSAs) and — depending on what state you live in — 529 college savings plans let you make prior-year contributions until April 15 that may be tax-deductible. Here’s how they work.

You can contribute up to $7,000 to an IRA for tax year 2025, or up to $8,000 if you’re age 50 or older. 

If you’re not covered by a workplace retirement plan, and neither is your spouse, you can deduct your full contribution amount from your federal income taxes, even if you take the standard deduction. 

If you or your spouse are covered by a workplace retirement plan, the deduction begins to phase out at a modified adjusted gross income (MAGI) of more than $77,000 for single filers or $230,000 for those married filing jointly, and it’s disallowed entirely at MAGIs above $87,000 for single filers or $240,000 for those married filing jointly.

And if you’re eligible to deduct some or all of your IRA contribution from your federal income taxes, you can make a prior-year contribution for tax year 2025 until this year’s tax deadline.

(Note that this only applies to typical IRAs which are funded by voluntary contributions. The SIMPLE IRA, despite its name, is more like a mini 401(k) plan for small businesses, and is funded by employee paycheck deductions and an employer contribution. Since your SIMPLE IRA contributions are tied to your paycheck, there’s no way for you as an employee to make prior-year contributions.)

In this day and age, not all IRAs are the same. Different providers offer different retirement planning tools and different investment selections. And a few even offer matches on IRA contributions. 

» Best IRA accounts

A health savings account is a bit like a retirement account but for medical expenses. 

Some work like 401(k) plans, and are funded by paycheck deductions (and potentially an employer match) that are excluded from your gross income. 

But others work like IRAs — they’re funded by voluntary contributions you make, which are tax-deductible (even if you take the standard deduction).

You need to be enrolled in a high-deductible healthcare plan (HDHP) in order to contribute to an HSA. If you meet that requirement, you can contribute up to $4,300 if you have an individual plan for 2025, or $8,550 for a family plan. These limits may be reduced if you only have HDHP coverage for part of the year.

Money in an HSA can be invested in stocks, bonds, mutual funds and ETFs. It grows tax-free, and then withdrawals are also tax-free as long as they’re for qualified healthcare expenses. Check out our HSA overview to learn more.

Contributions to college savings accounts generally aren’t tax-deductible at the federal level, but more than 30 states offer some kind of state tax benefit for 529 plan contributions.

Of these, eight states allow prior-year contributions until the tax deadline or later: 

Each state has its own rules for 529 plans, which means that things like tax benefits, minimum and maximum annual contributions and exact deadlines vary from state to state. Check out our page on 529 plans by state to learn more.

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Below is a table of blue-chip stocks that are reporting earnings in April, with the expected dates and average analyst estimates for their upcoming earnings reports.

We’ve filtered the list for companies with a market capitalization of at least $300 billion. These are high-volume stocks of which earnings reports are often major trading events for options traders and day traders.

Source: Nasdaq.com. Data is current as of April 1, 2026, and intended for informational purposes only. 

» See our picks of the best options trading platforms.

Neither the author nor editor owned positions in the aforementioned investments at the time of publication.

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