Stock market today: Dow, S&P 500, Nasdaq slip amid fresh inflation data, continued Iran fallout

Oil prices may be front and center for the market amid the Middle East conflict, but one strategist still sees stocks in positive territory this month.

“Despite the view that this conflict is not ‘short’ but likely extended, we still expect March to be an up month,” Fundstrat’s Tom Lee wrote in a recent note.

The S&P 500 (^GSPC) is down more than 1% since the US-Israel war with Iran began on Feb 28.

However, Lee argues that stocks have historically rallied once a war begins. The adage “sell the build-up, buy the war” has largely held true in the past eight major conflicts, Lee said.

“Higher oil prices are the major impact of this conflict. And, in our view, the US is a net beneficiary of higher oil prices,” he added.

On Wednesday, Brent crude (BZ=F) and West Texas Intermediate (WTI) crude (CL=F) gained even as the Group of Seven countries agreed to release a combined 400 million barrels from the strategic petroleum reserve.

He pointed out that the US has been a net oil exporter since 2020, so rising crude prices directly boost the economy. Compared with other nations, the US benefits relatively more, since China, Asia, and Europe are hardest hit by the standstill at the Strait of Hormuz.

Lee also noted that global growth will likely slow because of higher energy costs, “which means investors will favor growth stocks, and the S&P 500 is basically a growth index.”

Still, the strategist sees “an overall tougher” environment for markets in 2026, forecasting a rally in stocks, followed by a decline, and then a strong year-end.