US equity indexes fell in the early hours of trading on Thursday after a two-day rally, amid investor optimism that the US-Iran war will end soon.
In March, major US stock indexes fell nearly 5% amid rising oil prices and inflation risks. The US Federal Reserve hinted at a single rate cut in 2026 amid uncertainty over the escalating Middle East conflict.
US stocks’ short-lived momentum this week was driven by reports that Washington could be ending the war, following unconfirmed reports that Iran’s president is willing to make a deal.
As America hoped for better news from US President Trump’s late Wednesday national address, his comments like US forces will ‘hit Iran hard’ and ‘send them to the stone age’ before withdrawing from the country in a couple of weeks didn’t impress investors as indexes quickly dipped following the speech.
JPMorgan Asset Management market strategist Jack Manley believes that more dramatic market swings are likely and investors should prepare accordingly. The markets are likely to be ‘extremely sensitive to headlines, both positive and negative,’ he said. ‘Now is still a good time to be taking risks, but realise it is going to be a choppy, bumpy ride over the course of this year.’
JPMorgan data revealed that investors trading in such volatile markets stand to lose the most. In the past two decades, six of the market’s 10 best days occurred within two weeks of its 10 worst days. For instance, the second-worst day of 2020, 12th March, was immediately followed by the second-best day of the year.
Hence, JPMorgan believes that investors who stay fully invested and diversified would earn the best returns, while those moving in and out of markets are likely to miss the ‘best days’ of stock gains.
US Indexes Are Great for Wealth Creation
Those who adopted the strategy of investing in the S&P 500 index of large-cap US stocks have witnessed massive gains, given that the index recorded three consecutive years of double-digit gains: 16% in 2025, 23% in 2024, and 24% in the year before that. However, the S&P 500 index is down 3.5% year to date.
‘In any given year, you might have a bad year being a US stock investor. But over the long run, history has shown very clearly that US equities are a great place to generate wealth,’ Manley said.
Although the Middle East conflict triggered wild market swings, other developments, such as the US operation in Venezuela, discussions of acquiring Greenland, and the collapse of the Japanese bond market, were already driving market uncertainty. ‘It’s not like this market was on fire before the conflict kicked off,’ Manley said.
The strategist believes diversification can safeguard portfolios from market jitters. Manley highlighted that exposure to global equities, fixed-income instruments, and real estate, which are uncorrelated with market returns, can support optimal diversification.
Elsewhere, The Mather Group managing director Brian Schmehil said that a long-term financial plan could help investors avoid making emotional trades. He recommends regular portfolio rebalancing and understanding risk tolerance that would help investors stay the course during market downturns.
‘Everybody thinks the wealth advisor is supposed to pick the best stocks or give you the best tax strategy,’ Schmehil said. ‘That is true, but with the age of AI, a lot of that stuff’s going to be table stakes. What’s really going to matter is having somebody who can understand your emotions.’
Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn’t indicate future returns.