Oil Price Volatility Masks a 10% S&P 500 Recovery

Investors who exit positions during oil-driven market swings convert temporary downturns into permanent financial losses. The S&P 500 has gained between 10% and 11% since March 30, recovering from a sharp drop at the start of the Iran-U.S. conflict on February 28. That conflict drove oil prices up more than 50%, causing the Federal Reserve to pause interest rate cuts. Market resilience is supported by a structural shift in energy reliance. The energy intensity of the global economy declined by 58% from 1970 to 2022, and the amount of oil needed to generate $1,000 of global GDP growth fell by 1.5 liters per year since 1984. Wall Street analysts expect 12% growth in first-quarter earnings for the S&P 500.