Muhlenkamp Quarterly Market Commentary – April 2026

by Jeff Muhlenkamp of Muhlenkamp & Company, 4/9/26

Fellow Investors,

We said in our January newsletter that we expected 2026 to be “another interesting year.” Events in February and March didn’t let us down as the United States and Israel resumed combat operations against Iran on 28 February. Iran’s response included closing the Strait of Hormuz to most shipping and conducting missile and drone strikes against energy production and processing facilities in the neighboring Gulf Cooperation Council states. These attacks make it clear that Iran hopes to drive up energy prices and create problems for both energy-producing and energy-importing nations. Iran apparently believes those nations will pressure the United States and Israel into ending combat operations (instead of joining the fight against Iran).

Overall, the impact of the war on markets can be summarized as: oil up, dollar up, bonds down, stocks down, gold down. Crude oil prices have increased from about $65 per barrel in February to roughly $102 on 31 March. The dollar, as measured by the DXY currency index, went from 98 in late February to 100 on 31 March. The interest rate on the 10 Year Treasury Bond was 4.01% on 2/26/2026, rising to 4.44% on 3/27/2026. As of the end of March, the S&P 500 is down roughly 4% from its early February peak, and gold is down about 13.5% from its late January peak.

Of course, while the war dominated headlines in March, it isn’t the only thing going on. U.S. real GDP growth in 4Q25 was .70%, down from 4.40% in 3Q25. This sounds bad, but recall we had a government shutdown in 4Q, and this skews the numbers. The Federal Reserve Bank of Atlanta’s GDPNow estimate for 1Q26 is currently 2.0%. The March 2026 U-3 unemployment rate was 4.3%, down slightly from February’s 4.4% and the same as January’s 4.3%. In light of the muddled employment picture and renewed concerns about inflation, the Federal Reserve left the Federal Funds Rate unchanged when it met in March. The U.S. Manufacturing Purchasing Manager’s Index, which had been below 50 (indicating a contracting manufacturing sector) since mid-2022, popped above 50 and into expansion territory in January and February. You’ve heard us talk before about how the manufacturing sector has been struggling, so we are pleased to report that things appear to be improving in manufacturing.