Gary Hager’s Weekly Market Perspective
What Business Owners and Investors Should Be Watching
Markets moved lower again this week, extending the recent pullback in U.S. equities. The S&P 500 declined roughly 2%, while the Dow fell close to 3% and the NASDAQ slipped just over 1%.
While geopolitical developments dominated headlines, it is important to remember that markets were already navigating several concerns—particularly elevated valuations and heavy reliance on technology sector earnings growth.
When uncertainty rises, markets tend to react quickly. But history also reminds us that long-term market direction is driven far more by economic fundamentals than by short-term events.
Below are several developments worth paying attention to.
1. Geopolitical Risk Has Returned to the Market
The escalation of tensions in the Middle East injected a new level of uncertainty into global markets. Energy prices moved higher as investors assessed the possibility of supply disruptions.
Historically, geopolitical conflicts tend to cause short-term volatility, but they rarely derail markets unless they significantly alter the economic outlook or energy supply dynamics.
For now, the biggest variable remains oil.
2. Energy Was the Only Sector to Post a Gain
Sector performance reflected a defensive repositioning by investors.
The energy sector rose about 1% for the week, benefiting from higher oil prices.
Meanwhile several sectors experienced sharper declines:
Materials dropped more than 7%
Consumer staples declined nearly 5%
Healthcare fell roughly 4.6%
Industrials declined about 4%
Technology stocks held up relatively well compared to the broader market.
3. The Jobs Report Missed Expectations
The latest employment report surprised to the downside.
The economy lost approximately 92,000 jobs, compared with expectations for a gain of about 55,000.
However, other indicators in the report remained relatively stable:
The unemployment rate rose slightly to 4.4%
Wage growth increased 0.4% month over month
While the headline number was disappointing, the broader labor market does not yet show signs of significant deterioration.
4. Manufacturing Remains in Expansion
The ISM Manufacturing Index slipped slightly to 52.4 from the previous reading of 52.6.
Any reading above 50 signals expansion.
After nearly a year of contraction before early 2026, the continued expansion suggests the industrial side of the economy still has underlying momentum.
However, the report also showed persistent price pressures within the manufacturing sector.
5. Oil Prices Remain a Critical Variable
Energy prices could play an outsized role in the months ahead.
Economic models suggest that a $20 increase in oil prices could:
Reduce U.S. GDP by about 0.1%
Increase inflation by roughly 0.4%
While those numbers are manageable, sustained increases in energy prices would create additional pressure for both consumers and policymakers.
6. Technology Continues to Drive Corporate Earnings
One of the most striking trends in today’s market is the concentration of profit growth.
Technology companies accounted for roughly 60% of corporate earnings growth in the most recent quarter.
This concentration helps explain why investor sentiment toward artificial intelligence and large technology companies has such a powerful impact on the broader market.
7. Volatility Has Returned
After spending most of the past year in a calm range, market volatility increased sharply.
The VIX index jumped to around 28, its highest level in nearly a year.
Higher volatility often accompanies periods of geopolitical tension and uncertainty about economic direction.
Investors should not be surprised if markets remain choppy in the near term.
My Perspective
The global economy entered this period with considerable momentum. Monetary policy, fiscal policy, and corporate earnings trends were all supportive of continued growth.
Unless the conflict results in major disruptions to global energy supply, the underlying economic expansion could remain intact.
Markets may continue to move unevenly in the near term, but long-term investors are generally better served focusing on fundamentals rather than headlines.
Bottom Line
Several forces are shaping markets right now:
Geopolitical tensions
Energy price movements
Concentrated earnings growth in technology
Elevated market valuations
These factors may create volatility, but volatility alone does not necessarily change the long-term trajectory of markets.
As always, separating short-term noise from long-term economic trends remains one of the most important disciplines in investing.
About Gary Hager
Gary K. Hager, CFP®, CBEC, CTFA is the founder of Integrated Wealth Management. For more than three decades, he has advised business owners and families on exit planning, estate planning, asset protection, and long-term wealth strategy.