---
title: "Geopolitical Tensions Weigh on Markets: SPY Down 1.70%, IWM Declines 2.18%"
canonical_url: https://www.stockexpertai.com/journal/2026-03-21/geopolitical-tensions-weigh-on-markets-spy-down-170-iwm-declines-218
last_updated: 2026-03-21T06:14:07.980Z
section: "Global Briefing"
author: "Reese Nakamura"
publisher: Stock Expert AI
tickers: SPY, BBCA
content_type: journal-article
---

# Geopolitical Tensions Weigh on Markets: SPY Down 1.70%, IWM Declines 2.18%

## The Take
- Geopolitical risks are creating market headwinds; consider diversifying into safe-haven assets like energy and monitoring macro developments closely.

_Equities face headwinds as Middle East tensions and rising oil prices fuel inflation concerns and risk-off sentiment._

The global macro picture is shifting. Escalating tensions in the Middle East, particularly the ongoing war in Iran and potential disruptions in the Strait of Hormuz, are weighing heavily on market sentiment. The SPY is down 1.70% as investors grapple with concerns about rising oil prices and their inflationary impact, potentially leading to more hawkish monetary policy. Small caps are also feeling the pressure, with the IWM declining 2.18% reflecting broader risk aversion.

Across asset classes, ETFs are largely in the red this month, with energy and oil commodities being notable exceptions, alongside Israel, suggesting a flight to safe-haven assets amidst geopolitical uncertainty. The JPMorgan BetaBuilders Canada ETF (BBCA) also faces headwinds, declining 1.50%, due to worsening Canadian macroeconomic conditions and trade tensions with the U.S. A potential technical recession, elevated unemployment, and declining consumer spending are increasing BBCA's risk profile.

While low levels of household and business debt in the US are providing some economic ballast, according to some analysts, the dominant narrative is one of caution. The technology-heavy QQQ also reflects this, down 1.85% on the session. The DIA is also down 1.12% demonstrating broad market weakness.

Macro regimes don't change overnight—but when they do, it matters. Investors should closely monitor developments in the Middle East and their impact on energy markets, inflation, and monetary policy. Diversification and a focus on risk-adjusted returns are crucial in this environment.

## Related Tickers
- [SPY](https://www.stockexpertai.com/stock/spy)
- [BBCA](https://www.stockexpertai.com/stock/bbca)

## Frequently Asked Questions

### How are geopolitical tensions affecting the stock market?
Geopolitical events, particularly in the Middle East, are creating market volatility. Concerns about rising oil prices due to these tensions are fueling inflation fears, leading investors to adopt a risk-off approach. This is reflected in declines across major ETFs like SPY and IWM, as well as sector-specific impacts.

### What ETFs are most affected by the current market conditions?
Broad market ETFs like SPY and IWM are experiencing declines. The article also highlights the JPMorgan BetaBuilders Canada ETF (BBCA) facing headwinds due to Canadian economic conditions. Energy and oil commodities, along with Israeli assets, are notable exceptions, suggesting a flight to safe-haven assets.

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_AI-generated under human editorial supervision. Educational research, not financial advice._