Is the Stock Market Crashing?

WHAT HAPPENED

• The S&P 500 Index closed the week negative for the fourth time in a row. This is the longest losing streak since February, 2025.
  
• Inflation is top of mind again for investors with the conflict in Iran showing no signs of ending soon. 
• Odds of a recession happening in 2026 have surged from 21% just two weeks ago to 37% today.

WHY IT MATTERS

• Earnings reports for top tech firms remain strong, yet the S&P 500 is routing. This means that the selling is not coming from weakness in the companies themselves, but the realization that they are overvalued and the risk is not worth it when there is so much going on in the world. Observing the reasons for the drop will help us better understand whether or not it will continue.
• Iran has shown no fear of retaliation against Israel and the United States. Over the weekend Iran launched over 300 ordnance into Israeli territory, injuring 160 people. Recent attacks demonstrate the will of the IRGCN to keep fighting. WTI Crude is hitting levels not seen since the start of the Russia-Ukraine war.
• On March 4, 2026 the odds of a recession in various betting markets was 21%. As of today, those odds have surged to 37%. Many investors don't take betting markets seriously, we do. By nature they are forward looking, and where people place their money matters. We will cover times where betting markets were proved right against the odds.

LET'S DIG DEEPER

We have the perfect storm of macroeconomic issues, geopolitical conflict, inflation, and bubbly valuations. All of these factors have been contributing to the broad-based market selloff. Let's break it down.

1. Yields are Pushing Higher: Specifically, the 10Y is back in the 4.4% ballpark. Bond markets are showing a concern for rising inflation, but there is another hidden cost to high yields, which is discount rates. Growth stocks like big tech are priced in on forward looking earnings, which means investors are willing to pay more for the growth the company will produce years down the road. Think of it like an investor asking themself "what are the future cash flows from company XYZ worth today?" The discount rate is the sum of the risk-free rate (10Y) and the rate premium. So, if the 10Y rises (risk-free rate) then the discount rate also rises, which actually lowers the valuation of company XYZ today, dropping the stock price. 
2. Overvaluation: CAPE is an acronym for Cyclically Adjusted Price to Earnings. Its a formula founded by Robert Shiller which is calculated by dividing the current price of the S&P 500 with the average inflation adjusted earnings over the previous 10 years. Historically, the average for Shiller's CAPE sits around 17, right now it's near 38. These extreme levels have only been seen once before, which was during the peak of the dot-com bubble. Below is a chart depicting the Shiller CAPE:Retrieved From: https://www.tradingview.com/chart/PAIfo4NN/?symbol=SP%3ASPX on March 22, 2026
3. Inflation: It's back on the menu. After years of inflation slowly working its way back down to the FED's 2% target, the recent conflict in Iran has shattered all expectations of continued declines. With the price of oil rising so sharply, inflation will rise as well. What's worse is that inflation is not actually the primary concern anymore, stagflation is. Stagflation is the disastrous mix of high inflation and slow growth. We have watched the labor market getting weaker while inflation was declining. This allowed the FED to shift their focus away from inflation in order to protect jobs. However, now they are in a no-win situation. They can't cut rates because inflation is heating up, yet they also can't hike them because the labor market is weakening. This is a terrible combo and one the U.S. economy hasn't truly seen since the 1970s. The markets have lost their safety net and can no longer trust that the Federal Reserve will step in to help.
4. Fear: Lastly, we have overall market sentiment in an absolute abysmal state. CNN's Fear and Greed Index, which measures market sentiment using seven different indicators, is at a 15 (extreme fear). What's interesting is the last time this level was hit was November, 2025 when the index hit an eight. When that happened, the S&P 500 only dropped about 6% from peak to trough. Currently, the level is a 15 and the S&P 500 has already dropped 7%. This divergence might suggest that we still have more room to fall. 

Retrieved From: https://www.cnn.com/markets/fear-and-greed on March 21, 2026.

Economic indicators, market sentiment, and geopolitical issues are all waiving red flags. Kalshi betting markets now hold a 37% chance the U.S. will enter a recession in 2026. On March 4 betting markets only predicted a 21% chance. Unlike a person giving a wrong economic opinion on television, people who bet in prediction markets actually have consequences for being wrong. They lose money. 

Retrieved From: https://kalshi.com/markets/kxrecssnber/recession/kxrecssnber-26 on March 22, 2026

In Short

We don't believe the market is crashing (for now). What we do believe is that we are seeing all the same warning signs that every recession in recent memory has seen. Big tech is overvalued at the highest levels since 1999, stagflation concerns are back in the mix for the first time since the 1970s, and geopolitical conflict is sprinkling a healthy dose of volatility onto all of it. Markets are pricing in a 37% chance that a recession will take place in 2026, we tend to agree with the bears on that one.

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Thanks for reading! Until next time, good luck and Godspeed.

Disclaimer:

The views and opinions expressed in The Pioneer Perspective are those of Daniel Harlow and Pioneer Financial, LLC and are provided for informational and educational purposes only. Nothing in this publication constitutes financial, investment, tax, or legal advice.

Market data and information are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. Past performance is not indicative of future results, and all investments involve risk, including the potential loss of principal.

Readers are encouraged to conduct their own research or consult a qualified financial professional before making any investment decisions.