New York, New York
— March 24, 2026
Nobody is talking about an AI bubble this week.
Right now, the Iran war is the trade. And because nobody knows how this plays out, markets are doing what they always do in uncertain regimes: swinging hard on headlines, repricing risk in real time, and dragging everything along with it.
If you’ve been watching the market whip around, moving up to a trillion dollars on tweets, you’re not alone. The psychology of this kind of tape is brutal.
So what do you do?
You stop treating the timeline as your source of truth and go back to the only two things that matter:
- Uncertainty drives risk-off
- Stocks represent businesses and earnings.
The war is creating uncertainty, and uncertainty is driving the selloff
This part is straightforward. The war is pushing uncertainty higher, and uncertainty is the one thing markets hate most. When uncertainty rises:
- Investors demand a higher risk premium
- Valuations compress
- Correlations go to one
That’s how you end up with broad selloffs that feel disconnected from fundamentals. Which leads to the more important point.
Stocks are starting to disconnect from the businesses underneath them
In periods like this, stock prices can move faster than the underlying businesses change. That’s your opportunity and your danger at the same time. If you own great companies with real moats, it can feel insane to watch them trade like they’re guilty by association. The question becomes: is the market repricing the business… or repricing fear?
A quick valuation check: the S&P 500 P/E is coming down
To anchor this in reality, we pulled the S&P 500 P/E for perspective.
- It’s off its high around 30
- Down to roughly 26
That’s meaningful. It’s not “cheap,” but it’s also a shift.
And it’s about halfway back toward the “benchmark low” we saw around Liberation Day, which we’ve been using as a reference point for when the Trump admin might be forced to shift on policy.
That’s the point of tracking valuation in a chaotic tape: not to call the bottom, but to understand when the market is moving from “frothy” to “reasonable.”
The bad news if you’re already in: you’re along for the ride
If you’re already fully positioned, the bad news is you don’t get to pretend volatility is optional. You’re in it. Even if you own the right companies, you still have to survive the tape, and it could be a little while.
The good news: this rotation is creating entry points
For investors who have been watching the market hit new high after new high and waiting for an entry, this rotation is starting to present one. Sentiment has shifted more bearish. And it’s never easy to go against the herd when the headlines are loud. But the key is anchoring to reality, not sentiment.
If you do your research, think long term, and recognize something the market is temporarily ignoring, you have gold.
Bottom line
Right now, the war is the dominant trade, and uncertainty is compressing valuations across the board.
That’s painful in the moment, but it’s also how markets hand out opportunity to investors who are willing to stay calm, stay analytical, and focus on businesses over headlines.
We’re dropping an updated watchlist on WallStreetGameNotes.com this week — newsletter subscribers will get it first!
As always, thanks for reading. Be good.