March marked the weakest month for equities in the past year and capped off a soft first quarter for most major indices. Before last week, the S&P 500 was down five weeks in a row, which was the longest consecutive negative streak since 2022. Below are the March returns for the popular benchmarks that investors track (Data provided by Y-Charts & Commonwealth Financial Network):

• S&P 500 Index:-5.1%
• Dow Jones Industrial Average: -5.4%
• Nasdaq Composite Index: -4.8%
• Russell 2000 Index: -5.1%
• S&P Target Risk Moderate: -3.64%

Periods of volatility around this time of year are becoming a familiar pattern for investors. Most recently, in April 2025, markets reacted sharply to the announcement of new tariff policies. This year, a different, but interconnected, set of factors contributed to first-quarter weakness:

• Escalating geopolitical tensions in Iran
• Rising oil prices
• A pause in Federal Reserve rate cuts
• A strengthening U.S. dollar

Importantly, many of these developments are linked. Geopolitical conflict often creates ripple effects across global markets, impacting energy prices, central bank policy expectations, and currency movements. The current environment is a clear example of how one catalyst can influence multiple areas of the financial system.

That said, it’s important to maintain perspective. A weak start to the year does not necessarily dictate the outcome for the remainder of 2026. Market environments can shift quickly, and periods of volatility often create opportunities for disciplined, long￾term investors who stick to a well-defined plan.

Historical data provides some useful context. In midterm election years, market pullbacks are common, but so are strong forward returns following those declines. While this does not guarantee that a market bottom is already in place, it does reinforce the importance of staying focused on long-term trends rather than short￾term noise.

In the near term, we should remain realistic. Historically, periods following extended losing streaks, such as five consecutive down weeks, have often led to continued volatility in the weeks and months that follow. Patience and discipline remain key.

Looking ahead, earnings season will be an important focal point. Recent upward revisions to several large companies’ fundamentals suggest that fundamentals remain intact. Over time, corporate earnings, not headlines, are the primary driver of stock prices. This shift in focus may help stabilize sentiment as we move further into the year.

Our broader outlook remains unchanged. Midterm election years have historically been front-loaded with volatility, particularly in the first three quarters. However, the data has consistently shown stronger market performance as the year progresses.

As always, don’t hesitate to contact our team with any questions.