Equity markets retreat 6.8% from January highs amid geopolitical turmoil. The S&P 500 has faced pressure as Iranian blockade of the Strait of Hormuz sends oil prices surging, disrupting energy markets globally. Tech giants Tesla and Nvidia lead the year-to-date decline, while small and mid-cap stocks show relative strength. European and Asian markets particularly vulnerable to commodity headwinds and inflation concerns. Defensive positioning now warranted as investors seek shelter. Cash allocation rising to 15% as few safe havens remain in current environment. Historical context suggests this pullback remains modest, but heightened geopolitical risks and energy disruptions warrant cautious stance. Portfolio managers emphasizing disciplined approach and data-driven decisions as market volatility persists into spring.
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