Friday, March 28, 2026 capped off a punishing stretch for US equity markets with five straight weeks of losses, the longest such run since the 2022 bear market. The S&P 500 shed 2.1% on the week, finishing at 6,368.85, its weakest close in seven months. The Nasdaq extended its correction, losing 3.2% for the week and now trading nearly 13% off its October record high. The Dow fared somewhat better but still fell 0.9% for the week, crossing into correction territory after sliding more than 10% from its peak.
Energy was the rare exception in an otherwise punishing tape, gaining more than 25% year to date more than twice the performance of any other sector. Brent crude finished the week above $110 a barrel and WTI settled above $94, with both benchmarks driven higher by the ongoing disruption to oil flows through the Strait of Hormuz. Iran's effective blockade of the waterway has left thousands of vessels unable to transit, and while the Treasury Department moved to ease supply pressure by permitting India to buy Russian oil stranded offshore, the broader supply crunch shows no signs of letting up.
Technology absorbed the heaviest losses. The sector has now given back 12% from its highs as confidence in the AI spending cycle continues to erode. Nvidia, Microsoft, and Alphabet each posted single-day declines Friday, while Meta suffered a particularly rough stretch down roughly 12% since Wednesday following a wave of layoffs and a court ruling finding its platforms legally addictive. Semiconductor stocks were hit separately after Google unveiled an AI architecture it claims requires substantially less memory to operate, raising questions about future chip demand across the industry.
Financials offered no refuge either. JPMorgan and Visa both dropped around 3% Friday as the credit environment grew cloudier. Markets have been buzzing with stagflation fears the toxic pairing of stagnant growth and persistent inflation that is particularly corrosive for banks, squeezing lending margins while raising the risk of credit deterioration.
Fed Chair Jerome Powell; however, pushed back on that characterization at his March press conference, saying he reserved the term for the 1970s when unemployment hit double digits and inflation ran far hotter than today. "That is not the situation we're in," Powell told reporters though he acknowledged the Fed is navigating real tension between its dual mandates to control inflation and maximize employment. Consumer-facing companies fared no better regardless of what you call it, with Gap reporting a quarterly earnings miss and falling 6%, a sign that households are pulling back as energy costs crowd out other spending.
The geopolitical backdrop driving all of this remains deeply unsettled. The US-Israel war on Iran entered its 26th day with no diplomatic breakthrough in sight, and markets are increasingly pricing in a drawn-out conflict with sustained energy disruption as the baseline scenario. Trade tensions compounded the pressure when China launched a formal trade probe against the US in response to the latest round of tariffs from Washington raising the possibility of simultaneous military and trade confrontations with two major global powers.
The Federal Reserve has little room to maneuver. The OECD raised its US inflation forecast for 2026 to 4.2%, far above the Fed's own projection of 2.7%, and futures markets now assign better than even odds to a rate hike before year end. That shift hit growth and technology stocks particularly hard, as higher rates compress the valuations of companies trading on future earnings potential. Citigroup responded by cutting its equity allocation to neutral. Technically, the S&P 500's next meaningful support sits near 6,175, and analysts say a breakdown in semiconductor names could be the trigger that sends the index there.