Nasdaq Enters Correction? What’s Next? | S3 E131 | 03-27-26

Markets closed out the week under pressure as weakening consumer sentiment added another layer of concern to an already volatile environment.

In this episode of Markets with Megan, Verdence CIO Megan Horneman breaks down the latest University of Michigan Consumer Sentiment Survey, which showed confidence falling to a three-month low. Both current conditions and future expectations declined, with forward-looking sentiment seeing its largest drop in nearly a year.

At the same time, inflation expectations jumped sharply, with consumers now anticipating 3.8% inflation over the next year — the biggest monthly increase since last year. Rising energy prices tied to geopolitical tensions are beginning to filter into how consumers view both prices and their own financial outlook.

Megan explains why this matters for markets, especially as declining sentiment spreads beyond lower-income households into middle- and higher-income consumers. Combined with ongoing market volatility, this shift could begin to impact spending — a key driver of economic growth.

She also highlights how markets are reacting, with continued weakness across equities and the Nasdaq officially entering correction territory, as investors weigh rising inflation, higher rates, and geopolitical uncertainty.

📊 Could weakening consumer sentiment and rising inflation expectations start to slow spending and impact the broader economy? Watch now for Megan’s perspective.

🎧 Subscribe to Markets with Megan for regular insights on economic data, markets, and what it means for investors.

🔔 Don’t forget to like, subscribe, and hit the notification bell so you never miss an update.

🌐 Full podcast archive:
 https://marketswithmegan.fm

#MarketsWithMegan #ConsumerSentiment #Inflation #MarketVolatility #StockMarket #Nasdaq #InterestRates #EconomicData #Investing #EconomicOutlook

https://youtu.be/YdAH6lyzC0A

Disclaimer:  material was prepared by Verdence Capital Advisors, LLC (“VCA”). VCA believes the information and data in this document were obtained from sources considered reliable and correct and cannot guarantee either their accuracy or completeness. VCA has not independently verified third-party sourced information and data. Any projections, outlooks 
or assumptions should not be construed to be indicative of the actual events which will occur. These projections, market outlooks or estimates are subject to change without notice. This material is being provided for informational purposes only and is not intended to provide, and should not be relied upon for, investment, accounting, legal, or tax advice. Past performance is not a guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance 
that the future performance of any specific investment, investment strategy, or product or anynon-investment related content, made reference to directly or indirectly in these materials will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. You should not assume that any 
discussion or information contained in this report serves as the receipt of, or as a substitute for, personalized investment advice from VCA. Due to various factors, including changing market conditions and/or applicable laws, the c...

Transcript

Somber Mood Heading Into Spring

Megan Horneman 0:00

Consumers are rounding out this first quarter of 2026 on a pretty somber note if you look at the University of Michigan Consumer Sentiment Survey. It's Friday, March 27th, and this is Markets with Megan. If you like this podcast, please subscribe, hit the alarm bell. You can share it with friends, family, colleagues. We go over that economic data that you see on a regular basis and what it means for the markets, what it means for your investments. And this morning we received the final reading on March's University of Michigan Consumer Sentiment Index. And it showed that consumer sentiment fell to a three-month low for the month. We saw a decline in both of the components, not only the sentiment on current conditions, but also sentiment on future expectations. In fact, that saw the biggest decline that we've seen in about 11 months. The other thing that this index looks at is inflation expectations. And we saw that one year ahead inflation expectations rose pretty significantly to 3.8%. That means that consumers think that what's been going on with the war in Iran is going to filter into inflation over the next year. It was actually the largest one-month increase that we've seen since that liberation day move in April of last year. Now, some of the reasons why sentiment was weak was not just because of inflation, but also the expectation for household finances. So when you have higher prices and you're not as optimistic about income, that causes a deterioration in the expectation for household finances. But we also saw more people expecting higher interest rates over the next year. So for a long time, um consumers had favored had expected that the Fed would be cutting rates. Well, it's starting to get a little bit more realistic. And in this report, we saw not only declines in lower income households, which do tend to be more sensitive to the moves we've seen in energy prices, but because of the market weakness, we're starting to see this filter into some of those middle and higher income households. So clearly uh the sentiment has been weak. Next week, we'll get information on spending retail sales. So we'll see if some of this weak consumer sentiment filters into spending numbers. And the markets are significantly weaker again today. It doesn't have to do just with this report. In fact, um, sometimes these reports get overlooked because it is a second reading on this index, but it has a lot to do with just this ongoing tensions with Iran, the uncertainty around um what's going on with Iran, and we are seeing um energy prices again higher today. We're also seeing a pretty big um slip in technology stocks where the Nasdaq has now entered correction territory. That's all we have for today and this week. If you want a history of our podcast, you go to marketswithmegan.fm. Thank you.