The S&P 500 is down about 2% on March 3 after South Korea’s KOSPI Index tumbled 7.2%.
The KOSPI drop is significant because the index comprises major chipmaker and consumer electronics giant Samsung, a major player in memory in high demand globally due to AI data center buildouts; SK Hynix, another semiconductor giant; and industrials like Hyundai Motor.
Investor optimism had driven the KOSPI up 34% year to date before the retreat.
Top Declining Stocks (March 3, 2026):
- SK Hynix (000660): Dropped 11.5%.
- Hyundai Motor (005380): Fell 11.72%.
- Korean Air (003490): Declined 10.32%.
- Samsung Electronics (005930): Fell 9.88%.
Source: Korea Times.
The sell-off stems from a growing slate of uncertainty. I’ve spent three decades tracking markets, including as a Wall Street sell-side analyst, and if there’s one thing that global investors hate, it’s a lack of clarity.
When major indexes stumble overseas, it often spills over into the U.S. market, as it did today. While the dip is concerning, the key won’t simply be the S&P 500, Dow Jones, and Nasdaq’s opening print, but how these indexes trade into the close.
Uncertainty spikes after tariff tantrum, Iran war
The first bout of uncertainty landed in mid-February when the Supreme Court delivered President Donald Trump’s tariff plans a blow. The Court determined that the President overstepped when he used the International Emergency Economic Powers Act (IEEPA) as the legal pathway to instituting many of the tariffs enacted in 2025.
Major Asia stock performance (3/3/2026):
- Japan’s Nikkei: -3.1% to 56,279.05
- Shanghai Stock Exchange: -1.43% to 4,122.68
- Shenzhen Stock Exchange: -3.07% to 14,022.39
President Trump reacted quickly, instituting 15% global tariffs on imports using a different authority, Section 122 of the Trade Act of 1974. However, that authority has never been used, and many believe it will be subject to legal challenges.
Absent Congress passing tariffs into law, global trade will continue to operate under a cloud of unpredictability.
More Wall Street
- Billionaire Dalio sends 2-words on Fed pick Warsh
- Top analyst bets these stocks will boost your portfolio in 2026
- Bank of America sends quiet warning to stock market investors
The U.S. and Israel’s attack on Iran, including the assassination of its Supreme Leader Ayatollah Khamenei, further upends the proverbial apple cart.
The longstanding detante with Iran has ended with a push for significant regime change that ultimately may reshape Middle East politics and global oil markets.
In the short term, unease over ongoing missile attacks and the risk of the conflict spreading or escalating to a ground operation, limiting or preventing Middle East tankers from using the Strait of Hormuz to export oil worldwide, has caused crude oil prices to skyrocket.
	CHARLY TRIBALLEAU /
Brent Crude oil is up 23% in the past month, including an 18% surge in the past five trading sessions. West Texas Crude has risen 20%, including a 16% climb over the same period. The pop has already translated into U.S. gasoline prices rising to $3.11 per gallon, up from $2.88 a month ago, according to AAA.
“Based on the numbers at this moment (3/3/26, 945am ET), the average price of gasoline would likely climb to about $3.30-$3.35/gal in time. Any further changes in markets will change this,” wrote Gas Buddy’s Patrick De Haan on X.
Inflation risk ratchets higher, trapping Fed
The pressure on the economy from rising energy prices is significant. It directly accounts for 6.3% of Consumer Price Index inflation, according to the American Petroleum Institute. It also indirectly impacts much of inflation because energy costs are embedded within all goods.
A rerating of energy prices higher, if persistent, will flow through to inflation, pressuring business and household spending and further hamstringing the Federal Reserve, which sets interest rates based on a dual mandate:
- Low inflation (targeting 2% annualized)
- Low unemployment
The two goals often contradict one another. When the Fed raises rates, it shrinks inflation but causes unemployment, and vice versa. This year, the Fed opted against lowering interest rates in January after three consecutive rate cuts, fearing it would trigger more inflation.
In December, the Personal Consumption Expenditures Price Index registered 2.9% inflation, according to the Bureau of Economic Analysis, up from 2.7% in October. Meanwhile, the U.S. unemployment rate was 4.3% in January, up from 4% one year ago, according to the Bureau of Labor Statistics.
Stock market drop isn’t uncommon
The S&P 500, Dow Jones, and Nasdaq don’t operate in a vacuum. When one starts moving, the others move in suit.
The S&P 500, the benchmark for stock market returns, has traded in a range of 6700 to 7000 since the fall; however, as I previously wrote, the market has struggled on rallies toward the high end of the range, despite bullish Wall Street forecasts and solid earnings growth.
The move today is particularly worth watching because it puts December’s 6721 low in play. A close on volume below that level could trigger more selling, with risk down to the index’s 200-day moving average, which currently rests near 6567.
The technology-heavy Nasdaq Composite is similarly challenging its 21898 low in November, and unlike the S&P 500, it’s almost at its 200-day moving average. A sustained break below that trendline would be particularly worrisome, as many traders consider the 200-dma a key line in the sand for sell orders.
While those declines and the near-term risk are real, investors should keep in mind that drops of 5% to 10% are very common, occurring “almost every single year,” according to Berger Financial Group. Corrections of 10% or more happen about every 18 months.
In mid-term Election years, corrections are also common and potentially par for the course. Since 1950, the average S&P 500 drawdown during a midterm year is 17.5%, the steepest decline out of the four-year Presidential Election cycle.
That said, investors may want to keep perspective. After all, historically, mid-term year weakness has set the stage for notable gains off the lows in year three of the cycle. Since 1950, the average one-year return following mid-term elections is about 15%.
The returns have been even better since 1980, rising 17.5% in the year after the midterm election, according to U.S. Bank.
“That stronger average does not mean every post-midterm year is a winner, and it does not imply a single “correct” portfolio move for all investors. Instead, it highlights a recurring rhythm: markets often struggle with uncertainty and improve once the fog clears – provided the economic backdrop cooperates,” wrote U.S. Bank.
Related: Morgan Stanley delivers curt 2-word verdict on S&P 500
