When Fear Spikes and Fundamentals Hold Steady

Editor's Note: There will not be any commentary from 3/13 through 3/20.

When Fear Spikes and Fundamentals Hold Steady

• The national average for gasoline prices fell 6.4% in February.

• The same number is down 2.3% so far for March.

• Fed survey data point to a little change in prices received.

The hardest markets to navigate are the ones where fear is moving faster than the facts…

One of the hardest things for investors to do when the noise gets loud is to separate the signal from the noise. What I mean is simple: focus on the data, not the emotional pull of the daily headlines. And right now, there’s plenty of noise designed to knock us off balance.

You see, the headlines are meant to be emotionally charged because that’s the only currency traditional media has left. They know digital now controls more than half of all media revenue. So, fear becomes the last tool to stay relevant and pull in eyeballs. And a conflict in Iran is exactly the kind of chaos their business model feeds on.

Financial outlets like The Financial Times, CNBC, and Bloomberg are churning out stories about skyrocketing oil prices, rising gasoline costs, and runaway inflation. Those headlines quickly morph into narratives about Fed rate hikes and an imminent economic collapse. But what they’re not doing is checking those claims against historical economic data.

Because if they did, they’d notice the national average for gasoline prices so far this month is down 2.3% compared to last year and still below the typical March gain of 5.1%...  

That’s why we must look at data through a historical lens. It keeps us grounded in what’s actually happening instead of reacting to whatever headline is trending. And with so much attention being placed on what may or may not happen with inflation growth, it’s worth doing our monthly check‑in on how the Consumer Price Index (“CPI”) could play out later this week. Based on the gas price chart above, the March fallout may not be as bad as we’re being led to believe. And from what I’m seeing for February, inflation growth barely budged from January.

But don’t take my word for it, let’s look at what the data’s telling us…

Prices Received

The first place I want to start is a gauge I built using monthly manufacturing and services index data from regional Fed banks. They ask businesses whether activity is rising, falling, or holding steady, and then publish indexes to measure the change.

I’ve combined data from Dallas, Kansas City, New York, and Philadelphia. Together, these regions account for about 32% of national economic output. For this chart, I focused on prices received, a proxy for CPI. The February gauge rose, but not by much…

I weighted the mix to 65% services and 35% manufacturing to reflect CPI composition. February’s reading came in at 20 compared to 19.1 in January. That’s still within the range of outcomes we’ve experienced over the last two years. The driving factor was stable services prices, while the manufacturing sector experienced slight growth. So, I wouldn’t be surprised to see monthly growth in the 0.2% to 0.3% range for February.

House Prices

As I’ve been saying, house price growth is slowing, and that matters. Shelter accounts for 35% of CPI. Owners’ equivalent rent makes up 26%, while rent of primary residence adds another 7.5%. So, housing plays a big role.

The latest data from the National Association of Realtors shows continued easing in existing home price growth…

In January, the median existing home price was almost $397,000, a 2% year-over-year drop. That’s one of the weakest results we’ve experienced based on data going back to 2018. It’s also well below the typical 6.4% gain seen during the month over that same time span. On a month-over-month basis, prices were little changed.

Zooming out, the trend is clear: eleven straight months of sub‑3% annualized growth and three straight months of outright contraction. The last time the environment was this weak, the Fed was still raising rates. That should help keep a lid on runaway inflation

Gas Prices

Lastly, let’s go back to gasoline prices. It’s a line item that hits almost every household, because fuel in the tank is what lets us live our lives and keep everything moving.

The chart below shows the Energy Information Administration’s (“EIA”) monthly gasoline price data, covering all grades. Gas prices fell in February versus 2025. The average cost per gallon was $3.04, compared to $3.25 a year ago, a 6.4% decrease…

As you can see, gas prices tend to rise in early spring, peaking in April. Then they gradually ease through the rest of the year. It’s not until the last few months that the comparisons become the most difficult with the average monthly growth falling below 3%.

So far in March, the national average for a gallon of gasoline is $3.15 according to the EIA. That compares to $3.22 last year, meaning we’re down 2.3% so far this month. And looking at 2025, we don’t run into a lower monthly average until December.

Now, this doesn’t mean fuel prices can’t go higher. With the Strait of Hormuz closed, there’s more competition for a constrained supply of global oil. But since 2010, the typical month sees a 3.8% increase at the pump. That tells us there’s still a fair amount of cushion before gasoline prices meaningfully stoke inflation.

Bringing It All Together

At the end of the day, the headlines are loud, the narratives are dramatic, and the uncertainty feels real. But when you strip out the emotion and look at the data, the picture is far more stable than the media would have you believe. And that’s the whole point: in moments like this, staying anchored to the numbers isn’t just discipline, it’s a competitive advantage.

Late last week and into the weekend, several reports suggested Iran is looking for an off‑ramp by reaching out to the U.S. through intermediaries. Once we start to see real progress toward de‑escalation and safe passage through the Persian Gulf resumes, oil prices should begin to ease. As that happens, fear will fade, investors will refocus on fundamentals, and the shift should underpin a steady rally in the S&P 500 Index.

Five Stories Moving the Market:

Iranian President Masoud Pezeshkian apologized to neighboring states that were affected by its military actions; Pezeshkian also stated Iran's military would respond firmly to attacks from U.S. bases in the region – Reuters. (Why you should care – even though the statement stoked angered with some of the country’s clerics, the tone appears to be incrementally changing)

The U.S. has so far rejected Iranian overtures to begin talks that could figure out ways to end the conflict; Iranian intelligence sent word this week to the US it could be prepared to open talks on how to end the war – CNN. (Why you should care – this follows recent reports that Iran has been trying to reach out to the U.S. via other countries in an attempt to discuss ending hostilities)

The U.S. and Israel have discussed sending special forces into Iran to secure its stockpile of highly enriched uranium at a later stage of the war; it remains unclear whether this would be a U.S., Israeli, or joint mission – AXIOS. (Why you should care – investors will likely frown upon the potential for troops to hit the ground in Iran)

Chinese Foreign Minister Yi Wang said U.S.-China dialogue is vital to preventing globally damaging miscalculations; Yi said both sides must work together to manage differences, ahead of an upcoming summit between Presidents Donald Trump and Xi Jinping – Reuters. (Why you should care – recent military actions by the White House against Venezuela and Iran are limiting Beijing’s access to natural resources)

The United Arab Emirates and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply; the countries are running out of places to store oil – Bloomberg. (Why you should care – a prolonged shutdown in the Strait of Hormuz could cause global oil prices to run even higher)

Economic Calendar:

Earnings – HPE, KFY, MTN, WMK

China – CPI, PPI for February

Japan – Wage Income for January

Japan – Bank Lending for February

Germany – Factory Orders, Industrial Production for January (3:00 a.m.)

Switzerland – SECO Consumer Climate for February (4:00 a.m.)

Eurozone – Sentix Investor Confidence for March (5:30 a.m.)

U.S. – Conference Board Employment Trends Index for February (10:00 a.m.)

U.S. – NY Fed Consumer Inflation Expectations for February (11:00 a.m.)

Treasury Auctions $89 Billion in 13-Week Bills (11:30 a.m.)

Treasury Auctions $77 Billion in 26-Week Bills (11:30 a.m.)