Key Highlights
Market Movers & Shakers
  • U.S. equity markets extended their losing streak last week as the ongoing conflict in the Middle East weighed on risk assets.
  • WTI crude oil surged more than 50% month-to-date to over $100 a barrel as the Strait of Hormuz closure showed little signs of resolution.
Updates & News
  • The recent uptick in volatility has presented a number of opportunities to incept new positions in Tandem’s strategies.
  • From the laundry room to the drive-through to the light switch on the wall, the newest additions to Tandem’s strategies share a common thread: predictable, consistent fundamentals throughout any economic environment.

Market Movers & Shakers

U.S. equity markets remained under pressure last week as geopolitical uncertainty and heightened market volatility acted as significant headwinds for risk sentiment. Rather than a singular, dramatic selloff, the price action was characterized by a grinding series of lower lows, particularly in the back-half of the week. The S&P 500 and the Dow Jones Industrial Average finished in the red for their fifth consecutive week, marking the longest such losing streaks for both indices since the bear market of 2022. The S&P 500 touched its lowest levels since early September. The tech-heavy Nasdaq slipped into correction territory after recording its tenth weekly decline in the past 11 weeks, and now sits more than 12% below its October 29th all-time high. Bucking the broader downward trend, small-caps showed resilience as the Russell 2000 notched a modest gain to become the week’s notable outperformer. Reflecting the week’s defensive tone at the sector level, Energy (+6.22%), Materials (+4.18%), Utilities (+2.94%), and Consumer Staples (+1.24%) were the week’s standouts, while Communication Services (-7.17%) and Technology (-3.46%) bore the brunt of the selling.



Source: FactSet

Equity and bond market volatility were both in focus last week. The VIX breached the 30 level for the first time since early March, marking its second-highest reading since the Liberation Day fallout in April 2025. Meanwhile, the MOVE Index, which measures the expectation of volatility in the U.S. Treasury market, surpassed 100 for the first time since June 2025, a reflection of the uncertainty surrounding the Federal Reserve’s next policy move. At one point during the week, the CME FedWatch tool was pricing in Fed rate hikes through year-end, a remarkable reversal from the 50+ basis points of cuts markets expected at the start of the month.

The simultaneous elevation of both equity and bond volatility is a combination that suggests that market participants are seeking protection across asset classes rather than rotating within them. Treasuries were weaker last week. The yield on the U.S. 2-Year Treasury note briefly crossed 4% for the first time since June, while the yield on the U.S. 30-Year Treasury bond touched 5% for the first time since September. Market breadth metrics confirm the underlying equity weakness. The S&P 500 advance/decline line has set a series of lower lows since its late February peak, while the percentage of stocks trading above their 50- and 200-day moving averages has declined sharply over the same period. It is worth noting, however, that the percentage of S&P 500 stocks trading above their 200-day moving average currently hovers just above 40%, uncomfortable territory, but still well above the roughly ~15% reading reached at the depths of last April’s Liberation Day selloff. That comparison cuts both ways: it suggests there is potential room for further deterioration if the geopolitical situation worsens, but also that the market has not yet reached the kind of washed-out, maximum-pessimism conditions that we experienced last April.



Source: FactSet

The conflict in Iran, now entering its fifth week, remained the primary catalyst for market volatility last week. Markets started the week with a measure of cautious optimism after President Trump signaled productive discussions and paused threatened strikes on Iranian energy infrastructure. However, this reprieve proved short-lived. Iran denied that any substantive talks were taking place, the Pentagon reportedly dispatched an additional 10,000 troops to the region, and Houthi rebels in Yemen fired missiles at Israel for the first time since the conflict began. While President Trump announced a 10-day extension to the energy-strike pause on Thursday, pushing the deadline to April 6th to allow for further diplomacy, the move failed to generate the same market relief as the initial delay. Tensions appeared to reach a deadlock by Friday; despite U.S. hopes for a positive response to a 15-point peace proposal, Iran’s Foreign Ministry dismissed the plan as a collection of “excessive and unrealistic” demands. Over the weekend, the Wall Street Journal reported that the administration is weighing high-risk military operations inside of Iran, citing U.S. officials. These include a potential mission to extract 1,000 pounds of uranium from within Iran and a plan to seize the Kharg Island fuel export hub. Taken together, these developments feel more escalatory than they do like off-ramps, though creating maximum pressure has always been central to the President’s negotiating philosophy.

Despite taking a significant hit militarily, the Iranian regime has demonstrated the continued ability to control tanker traffic through the Strait of Hormuz, which ultimately remains the key chokepoint for global oil markets. The lack of flow through the Strait has pushed oil prices to their highest levels since Russia’s invasion of Ukraine in 2022. WTI Crude Oil prices have surged more than 50% this month to over $104 a barrel, while Brent Crude, viewed as the global benchmark, topped $112 a barrel. Market participants are closely watching the widening spread between WTI and Brent as speculation stirs surrounding a potential temporary U.S. crude export ban to prioritize domestic energy security. The sharp increase in energy prices has already begun to have spillover effects from both an inflation (price hikes) and demand destruction perspective. The average price at the pump nearly touched $4 a gallon for regular gasoline last week, up from $2.98 a month ago, according to data from AAA. Diesel prices are now well above $5 a gallon on average.

Reuters reported that global airlines have begun hiking ticket prices and cutting capacity to cope with jet fuel costs that have roughly doubled since the start of the conflict. United Airlines CEO Scott Kirby told ABC News last week that fares would need to rise approximately 20% for the airline to cover the increase. Beyond the obvious hit to consumers’ wallets, this dynamic also presents a significant challenge for the Federal Reserve. While the Fed’s preferred inflation gauge, Core PCE, excludes the volatile food and energy categories, it still captures the indirect impact of these costs through service-based line items like airline tickets within the Transportation Services category. This means that price pressures being felt in energy markets will almost certainly show up in the Fed’s dashboard whether policymakers want to acknowledge them or not. Historically, the Federal Reserve has preferred to “look through” oil price shocks, viewing them as transient volatility. However, given the current environment, these second-round effects are likely to push core inflation metrics further away from the Fed’s 2% target. Consequently, persistent upward pressure on inflation gauges may force the central bank to maintain its restrictive stance for longer than the market currently anticipates – even with a new Fed chair taking the helm in the coming months.

Updates & News*

The recent uptick in volatility has presented a number of opportunities to add fresh names to Tandem’s strategies.

At the beginning of March, we incepted a position in Procter & Gamble (PG) in our Large Cap Core and Equity strategy. We subsequently added to the position once more around mid-March. Most are familiar with Procter & Gamble’s lineup of household staples, including Bounty, Tide, and Charmin, which are found in the vast majority of American pantries and laundry rooms. From starting the morning with Crest and Gillette to managing the kitchen cleanup with Dawn and Cascade, consumers interact with these brands daily, often regardless of the broader economic climate. PG’s portfolio represents the kind of sticky, non-discretionary demand that provides a defensive anchor during market volatility.

More recently, we had the opportunity to add McDonalds (MCD) to our Large Cap Core and Equity strategies and WEC Energy Group (WEC) to our Large Cap Core and Mid Cap Core strategies. McDonalds needs no introduction. With a global footprint spanning over 100 countries and a brand recognized by nearly every consumer, the Golden Arches operates with a level of operational efficiency and real estate dominance that few other firms can match.

On the other hand, unless you reside in the company’s service area, you are likely less familiar with WEC Energy Group. WEC Energy operates as a pure-play regulated utility holding company, serving 4.7 million customers across Wisconsin, Illinois, Michigan, and Minnesota. Unlike peers who may have diversified into merchant generation or unregulated midstream assets, WEC’s business model is overwhelmingly focused on regulated electric and natural gas distribution. This focus allows for highly predictable cash flow and earnings growth, positioning WEC as a safe haven defensive play within the utility sector, particularly during periods of market volatility. The company has built a reputation for “boring consistency”, meeting or exceeding management earnings guidance for 20 consecutive years, a track record unmatched by most utility peers.

Source: Source of all data is FactSet, unless otherwise noted.

*The transition level activity taken by Tandem is applicable to new manager-traded accounts and new money in manager-traded accounts, not the composite or firm-wide level. New manager-traded accounts and new money in manager-traded accounts are not automatically invested on the first day. Rather, they are transitioned into our strategy over a longer time period that is dependent upon market conditions, this process differs from Tandem’s model-provided strategies, where money is invested on the day the account opens. Strategy level activity is applicable to the composite and action is taken at the firm-wide level.

Print
Back to Archives

Disclaimer: Tandem Investment Advisors, Inc. is an SEC registered investment advisor.

This audio/writing is for informational purposes only and shall not constitute or be considered financial, tax or investment advice, or an offer to sell, or a solicitation of an offer to buy any product, service, or security. Tandem Investment Advisors, Inc. does not represent that the securities, products, or services discussed in this writing are suitable for any particular investor. Indices are unmanaged and not available for direct investment. Please consult your financial advisor before making any investment decisions. Past performance is no guarantee of future results. All past portfolio purchases and sales are available upon request.

All performance figures, data points, charts and graphs contained in this report are derived from publicly available sources believed to be reliable. Tandem makes no representation as to the accuracy of these numbers, nor should they be construed as any representation of past or future performance.

This document was originally written/recorded in English. Tandem does not guarantee the accuracy, completeness, or reliability of any translated materials, and shall not be held responsible for any discrepancies, errors, or misinterpretations arising from the translation process.