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Oil prices have surged 47% since the war in Iran began, driving inflation fears and pushing major stock indexes into correction territory.
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Nearly half of surveyed investors are buying the dip in popular stocks like Apple, Microsoft, and Nvidia despite market volatility.
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A growing number of investors expect the stock market to decline further, with 27% predicting a 10% or greater drop in the next six months.
A historic spike in oil prices and a correction for the Dow Industrials and the Nasdaq amid the war in Iran have rattled the capital markets, but individual investors say they are weathering the storm and, in some cases, buying the dips in some of their favorite stocks, according to our recent sentiment survey. While anxiety and skepticism are on the rise, nearly half of respondents say they are still cautiously optimistic, or optimistic about their investments.
The war in Iran and the uncertainty over the future of the Strait of Hormuz and oil prices dominate investors’ list of concerns lately, and for good reason. The 47% surge in oil prices since the war began was the largest price spike for crude in history, and the ripple effects helped push the Dow and Nasdaq into correction territory. Investors know from history that oil supply disruptions quickly lead to inflation, and sometimes a recession. It’s no surprise that inflation and a recession are also among the top five of respondents’ concerns. Over one-third of respondents believe there is a 50-50 chance of a recession in the next six months.
The recent selloff across most sectors of the stock market – except for Energy and Defense stocks—along with more geopolitical uncertainty—has prompted a growing number of respondents to curb their expectations for returns over the next six months. Less than a quarter of respondents expect stock market returns of over 5% over the next two quarters, while a growing number, 27%, expect the market to fall another 10% or more in that same time frame.
That said, few respondents admit to changing the amount they invest or what they are buying amid the volatility and the big selloffs in widely-held stocks like Apple (AAPL), Microsoft (MSFT) and Nvidia (NVDA).
The profound selloff in the biggest stocks, especially members of the Magnificent 7 like Tesla (TSLA) and Amazon (AMZN), has presented a buying opportunity for investors looking for a deal. Nearly half of respondents say they have been buying into the weakness in those stocks in hopes that their worst days are behind them. The most widely bought stocks among individual investors throughout March include popular holdings like Apple and Nvidia, as well as Microsoft, Micron (MU), and Nvidia, according to Schwab.
