The main diver of the market is oil.

Oil prices jumped back above $100 because the war with Iran has disrupted shipping through the Strait of Hormuz, a major oil route. When oil spikes, investors start doing the math immediately: higher gas prices, higher costs for businesses, and potentially higher inflation. That’s why stocks struggled, and it’s also why the 10-year Treasury yield rose slightly. Investors demanded a higher return to lend money when they think inflation might rise.

So we’re not seeing a panic in the market. What we’re seeing is investors are taking note of the increased risks in this environment and precautionary actions to reduce risks in their portfolio.

We got the February consumer inflation report, and it showed inflation holding around the same pace as January, basically “stable.” The important detail is this: February happened before the biggest leg of the oil spike really hit. So the market is mindful to not just react to the inflation report, but how the impact of the oil crisis might mean for March and April.

On top of that, consumer confidence slipped in early March, and a big reason was simple: gas prices jumped. When people see gas rise quickly, it changes how they feel about everything—groceries, bills, whether they can take a trip, whether they need to tighten up. Reuters noted gas prices were up more than 20% since the conflict started, and sentiment fell as that reality hit.

We also got another reminder that economic growth was already slowing even before the war. The last quarter’s growth rate was revised down to about 0.7%. That’s not “the economy is collapsing,” but it is “the economy doesn’t have unlimited strength to absorb new shocks.”

Next week is central-bank week, and what investors will be listening for is the tone:

That messaging matters because it can move rates quickly—and right now, rates are moving the whole market.

When oil jumps and trade routes get disrupted, the market starts paying up for anything tied to hard assets and basic inputs.

Stocks impacted by the war, not just energy companies:

529 plans are state-operated investment plans designed to give families a way to save money for college with substantial tax benefits. With the passage of the Tax Cuts and Jobs Act of 2017, these plans can be used for K-12 private school expenses as well.

Most states sponsor two types of 529 plans. Prepaid Tuition Plans and College Savings Plans

Prepaid tuition plans allow you to to prepay tuition at participating colleges and universities. Some states allow room and board to be prepaid as well. The basic concept is: the child can attend college in the future at today’s prices. The ability to avoid rising education costs is an attractive feature but not without any downside. In this plan, you purchase credits that cover future education costs.

Most prepaid tuition plans require residency in the state that is administering the plan. If you live in Virginia and select a prepaid 529 plan, your child will be restricted to attending a Virginia state college to have the full benefit from the prices you locked in with the plan. (Check your specific state’s prepaid plan’s rules.)

College savings plans are straightforward. They operate just like a custodial account in that the account holder invests on behalf of the named beneficiary. You invest in index and mutual funds. Similar to a Roth IRA, the capital gains free when withdrawn spent on qualified educational expenses.

Unlike the prepaid tuition plans, there is no in-state restriction as the money isn’t tied to credits established by a particular state.

The typical plan offers a number of investment options, including stock mutual funds, bond mutual funds, and money market funds. A very popular option is the age-based portfolio that automatically shifts toward more conservative investments as the beneficiary gets closer to college age. Withdrawals from college savings plans can generally be used at any college or university regardless of the state carrying the plan of the state of residence.

Continue reading here ⬇️