Economic brief: AAPL…BA…CAT…

Jon Manchester, CFA, CFP®, Chief Strategist, Wealth Management, looks at a market that has held up despite rising volatility and shifting leadership, where oil, supply constraints, and a handful of key variables are doing more of the work and shaping what comes next.

The ticker tape parade got its lofty beginnings high above Wall Street in late October 1886. In what was reportedly a spontaneous act, office workers tossed ticker tape out of their windows to celebrate the dedication of the Statue of Liberty. Pieces of ticker tape floated down amidst fog and rain as a crowd of nearly one million marched down to New York Harbor to watch the unveiling take place on what is now called Liberty Island. President Grover Cleveland spoke, months after tying the knot in the White House, and Lady Liberty was greeted with waving French and American flags, cannon blasts, and ringing church bells.

To date, lower Manhattan has hosted 209 ticker tape parades, according to the Downtown Alliance, most recently in 2024 for the WNBA champion New York Liberty.¹ Perhaps the most famous parade through the Canyon of Heroes honored General Dwight D. Eisenhower in June 1945—following Germany’s World War II surrender—but the full list is a fascinating and somewhat eclectic walk through U.S. history, filled with champion athletes, adventurers, veterans, and visiting foreign dignitaries. In 1910, the first officially sanctioned parade was thrown for former president Teddy Roosevelt, upon the occasion of his return from a 15-month African safari!

Ticker tape is now a vestige of a bygone era, replaced both as a source of confetti and more consequentially as a means of communicating stock prices (via telegraph lines). In the late 1860s, the stock ticker machine revolutionized trading, enabling access to dramatically faster pricing data. It remained the standard for close to a century before being forced into retirement by computers, but its legacy lives on via the tickers (trading symbols) used to buy and sell stocks: the ubiquitous quotes crawling across the screen on CNBC and other financial networks. Commentators still refer to “the tape” when discussing stock prices and a review of the markets might be a “tale of the tape.” Some stocks are perhaps better known by the ticker (GOOGL, for example) than the company name (Alphabet).

The current crop of Wall Street traders likely shredded some virtual ticker tape in the first quarter of 2026. Volatility picked up and not just the good (upward) kind. Within the Standard & Poor’s (S&P) 500 Index, 145 stocks declined by at least 10% in Q1, the highest level on that metric since 2023’s third quarter. At the other end of the spectrum, 126 stocks moved at least 10% higher, meaning that approximately 54% of the Index’s constituents experienced a 10% or greater price change for the full quarter. Both the Dow Jones Industrial Average (DJIA) and the NASDAQ Composite Index suffered a correction—a 10% decline from a recent peak—and these data points don’t fully capture the day-to-day volatility. In late February, analysts from Barclays PLC noted that single-stock volatility stood at about seven times that of the broader market, the widest divergence in at least 30 years.² This was prior to the Iran war, in a market environment characterized by rapidly shifting sentiment on how AI will ultimately impact various industries. Lacking many answers on that front, investors rushed for the exits in certain areas (software) while piling into makers of memory chips and other groups perceived as near-term AI beneficiaries.

Straightjacket
Bombing Tehran did not settle the markets. It lit a fuse under commodity prices, sending the price of Brent crude oil soaring as high as $121 per barrel before closing the quarter up 69%. Only a few years removed from a punishing bout with inflation—which saw the Consumer Price Index (CPI) peak at roughly 9% year-over-year growth—markets expressed an immediate distaste for this development. The tape’s antagonistic relationship with elevated crude oil prices is nothing new. This unease seems likely to persist until the supply shock eases. Piper Sandler’s chief investment strategist, Michael Kantrowitz, put it bluntly: “It’s a single-variable market. If oil doesn’t go down, the market won’t go up – period.”³ Following a year in which gold stole the show, so-called black gold is headlining 2026 thus far and threatening to derail the promise of a stable price environment in which the Federal Reserve (the “Fed”) could further reduce its Fed Funds borrowing rate and spur economic growth.

In another echo of the post-pandemic economic landscape, supply disruptions have reemerged, with the potential to clog global growth. The Strait of Hormuz bottleneck affects roughly 25% of the world’s seaborne oil trade and almost 20% of global Liquefied Natural Gas (LNG) exports, according to the International Energy Agency (IEA).⁴ The impact extends far beyond energy, however. The Middle East plays a key role in supplying fertilizers, sulfur, methanol, helium, aluminum, and other non-oil commodities.⁵ Tariffs had already scrambled supply chains, but the Strait shutdown is exposing further vulnerabilities. Regarding AI, the Financial Times pointed out: “Investors have committed trillions of dollars to the technology, one of the most power-hungry inventions ever, on the assumption of ample energy supplies and a slick chip production line that can cross more than 70 borders before reaching the final consumer.”⁶ A prolonged impasse in the Gulf would act as a governor of sorts, limiting speed in a region that is an important gas pedal for the global economy.

Shortages are seemingly everywhere: labor, power, semiconductors…even mineral water? Coca-Cola announced that Topo Chico, its carbonated mineral water brand, won’t be available until later this year. The product is sourced from Monterrey, Mexico where Coca-Cola has encountered issues with the wells. Fed Chair Powell acknowledged in a recent talk at Harvard University that the Fed’s main tool—controlling interest rates—really only has an impact on demand, not supply.⁷ Thus, monetary policy has its limits in dealing with a supply shock such as the Gulf going offline. Instead, the Fed is focused on monitoring longer-term inflation expectations, which to this point have remained muted. As for actual inflation, the Federal Reserve Bank of Cleveland’s inflation “nowcast” estimates that CPI has moved up to around 3.4% year-over-year growth currently, roughly one percentage point higher than it was in February.⁸

The replacements
Policymakers also face a thorny task in evaluating the labor markets. The initial months of 2026 have seen a raft of layoff announcements, many of which are AI-related. Notably, Block, Inc. (symbol: XYZ), headquartered in Oakland, CA, announced it would lay off 40% of the company. CEO Jack Dorsey posted to X: “we’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company, and that’s accelerating rapidly.”⁹ He was careful to emphasize that the decision was not made because the company is struggling, citing growing profits and profitability. Dorsey also predicted via a separate letter to shareholders that within the next year a majority of companies will reach the same conclusion and make similar structural changes. Minnesota-based logistics company C.H. Robinson has reduced its headcount by approximately 31% since 2022, replacing humans with hundreds of agentic AI agents that help process freight orders.¹⁰ The company says productivity has improved 40% over this timeframe.

Plenty of other companies have signaled intentions to significantly slash the workforce: Meta Platforms, Amazon, Oracle, and HSBC are just some of the downsizers. In January, U.S. employers announced more than 108,000 layoffs, the highest January level since 2009.¹¹ Admittedly, certain industries have a bigger bullseye for the AI transition, and this trend hasn’t (yet) materially impacted aggregate labor statistics. It does, however, pose some hard societal questions in the longer term. A structurally higher unemployment rate could also weigh on consumer demand. In the meantime, corporations can benefit from reduced labor costs and downtime. The Fed recognized the potential for productivity gains in its latest “Summary of Economic Projections” by increasing the median estimate of longer-run real Gross Domestic Product (GDP) growth to +2.0% from +1.8% previously.

Higher turnover isn’t just affecting the low-end worker. According to The Wall Street Journal, roughly one Chief Executive Officer (CEO) in nine was replaced in 2025 across 1,500 of the largest publicly traded companies.¹² That is the highest rate since at least 2010. To borrow from William Shakespeare: “Uneasy lies the head that wears a crown.” The heightened economic policy uncertainty could be a motivating factor for companies, along with the shifting sands caused by AI. Geopolitical concerns only add to a complicated decision matrix for corporate boards, particularly for firms with a global footprint.

Equity markets have demonstrated resilience in the face of the volatility revival. A still healthy outlook for corporate profits deserves credit, with S&P 500 operating earnings per share growth projected at nearly 18% for 2026. If energy prices remain elevated, increased caution may be warranted, but the markets—like the Fed—are taking a wait-and-see approach overall despite the choppy waters. Wall Street is used to the tumult, after all, conditioned by many decades of upheaval and the occasional ticker tape parade to soften the blows.

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1. “History of New York City’s Ticker-Tape Parades,” www.downtownny.com.
2. “Listless US Stock Market Masks Record Volatility Beneath Surface,” www.bloomberg.com, 2/21/2026.
3. “Wall Street Is Finishing the Worst Quarter for Stocks in Four Years,” www.wsj.com, 3/30/2026.
4. “Strait of Hormuz Factsheet,” www.iea.org, February 2026.
5. “The Strait of Hormuz crisis affects more than just oil. Here are 9 other commodities,” www.weforum.org, 4/1/2026.
6. “How the Iran war could derail the AI boom,” www.ft.com, 3/22/2026.
7. “Powell Says Private Credit Doesn’t Pose Systemic Risk,” www.bloomberg.com, 3/30/2026.
8. “Inflation Nowcasting,” www.clevelandfed.org, 4/3/2026.
9. “In a 600-word X post, Jack Dorsey justifies his decision to lay off 40% of Block’s workforce,” www.fastcompany.com, 2/27/2026.
10. “C.H. Robinson trims high-level managers as part of AI-driven cuts,” www.startribune.com, 3/30/2026.
11. “Layoffs in January were the highest to start a year since 2009, Challenger says,” www.cnbc.com, 2/5/2026.
12. “Companies Are Replacing CEOs in Record Numbers – and They’re Getting Younger,” www.wsj.com, 2/15/2026.

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