• Stocks close sharply lower as oil prices rise – U.S. equities were notably weaker today, with the Nasdaq leading the decline at about -2.4%, compared with roughly -1.7% for the S&P 500 and -1.0% for the Dow. The move lower was driven by a renewed rise in oil prices and worsening sentiment around Middle East negotiations, as mixed signals on a possible ceasefire and tougher rhetoric toward Iran revived concerns about supply disruption, inflation pressure, and a longer period of policy caution. Treasury yields moved higher alongside that shift in sentiment, with the 10-year Treasury yield rising about 0.1% to 4.43%, reflecting reduced optimism on de-escalation and lingering inflation worries. Abroad, global equity markets also reflected a more defensive tone, with Europe’s Stoxx 600 closing 1.2% lower, while Asian markets were mixed overnight as investors weighed the same geopolitical and energy-related risks. Stepping back, the broader backdrop still suggests an oil-driven shock that is likely to be growth-negative and inflation-positive, but not necessarily a repeat of past energy crises given a less oil-intensive economy and relatively solid underlying fundamentals. Overall, volatility may remain elevated in the near term, but if energy prices eventually stabilize, we think the larger picture still points to modest slowing rather than a deeper downturn, with resilience in the underlying economy helping to cushion markets over time.
   
• Why this is not a 1970s-style energy crisis – While the Iran conflict has created a major oil shock, today’s backdrop is fundamentally different from the one that produced the stagflation of the 1970s for several reasons. Energy is a smaller drag on consumers than it used to be — energy spending as a share of total consumer spending is materially lower than it was during the 1970s and early 1980s (roughly 2% today versus about 6% then), suggesting that the direct hit to household purchasing power from a given oil shock is smaller today. The U.S. is far more insulated on the supply side — The U.S. has been a net exporter of oil since 2019, and domestic natural-gas prices have remained relatively insulated from the disruption, even as Europe and Asia face a supply crunch. U.S. shale producers stand to benefit from higher prices, even if that support does not fully offset the drag from weaker consumer spending. Oil still matters, but less in a services-based economy — large oil-price moves still hurt, but the global economy is less oil-intensive than it was during the original energy crisis. Since 1950, the amount of energy required to produce one unit of GDP has fallen by roughly 70%, reflecting efficiency gains and the growing importance of the services sector.
   
• Broadening leadership a key theme of the first quarter – After three consecutive years of outperformance by technology and growth-style stocks, market leadership has broadened in the first quarter of 2026. Year-to-date, the energy sector has been the top performer, rising more than 35%. Industrials, materials, utilities, and consumer staples have also posted gains of more than 5%. Meanwhile, technology, communication services, and consumer discretionary have been among the laggards, each declining more than 5%. From a style perspective, the Russell 1000 Value Index has gained more than 2% this year, while the Russell 1000 Growth Index has declined by roughly 9%. Despite this year’s underperformance, earnings growth expectations for growth stocks remain strong, with estimates calling for earnings growth of more than 20% in 2026, supported by robust anticipated growth in the technology sector. In our view, diversification will be critical for investors over the remainder of the year. We recommend maintaining balance between growth and value stocks. We also favor the industrials and consumer discretionary sectors, offset by underweight positions in consumer staples and utilities as part of our opportunistic equity sector guidance.

Mona Mahajan ;
Investment Strategy

^{Source for all data: FactSet.} 

• Stocks rise on hopes for de-escalation in the Middle East – U.S. equity markets closed higher on Wednesday following reports late Tuesday that the United States presented Iran with a proposal to end the conflict, including a one-month ceasefire. The S&P 500 rose 0.5%, while small-cap stocks outperformed as the Russell 2000 Index climbed roughly 1%. Leadership was broad-based, with every S&P 500 sector trading higher except energy and real estate, while consumer discretionary and materials were among the top performers. Overseas, Asian markets rallied overnight, led by a gain of nearly 3% in Japan’s Nikkei, while European equities also traded more than 1% higher. Treasury yields closed lower, with the 10-year yield at 4.32% and the 2-year yield at 3.88%. In commodity markets, oil prices were down roughly 1.3% amid optimism around potential de-escalation in the Middle East.
   
• De-escalation hopes lift global markets – The United States reportedly offered Iran a 15-point proposal on Tuesday evening aimed at ending the conflict, sending global equity markets higher while pushing oil prices down to around $91 per barrel. However, headlines remain fluid, and Iran has denied that it is engaged in negotiations, contradicting reports from the U.S. administration. In our view, the clearest indication of meaningful progress toward de-escalation would be the resumption of crude oil flows through the Strait of Hormuz. Thus, volatility could persist as headlines evolve over the coming days and weeks. Nevertheless, our longer-term outlook for the economy and equities remains constructive. Yesterday offered an initial read on business activity amid the conflict, with the March S&P Global Purchasing Managers’ Index (PMI) indicating that U.S. business activity slowed relative to the prior month, but remained in expansion territory, potentially signaling near-term resilience. We continue to see attractive opportunities in U.S. large- and mid-cap equities, as well as in international developed-market small- and mid-cap equities and emerging-market equities.
   
• Broadening leadership a key theme of the first quarter – After three consecutive years of outperformance by technology and growth-style stocks, market leadership has broadened in the first quarter of 2026. Year-to-date, the energy sector has been the top performer, rising more than 35%. Industrials, materials, utilities, and consumer staples have also posted gains of more than 5%. Meanwhile, technology, communication services, and consumer discretionary have been among the laggards, each declining more than 5%. From a style perspective, the Russell 1000 Value Index has gained more than 2% this year, while the Russell 1000 Growth Index has declined by roughly 9%. Despite this year’s underperformance, earnings growth expectations for growth stocks remain strong, with estimates calling for earnings growth of more than 20% in 2026, supported by robust anticipated growth in the technology sector. In our view, diversification will be critical for investors over the remainder of the year. We recommend maintaining balance between growth and value stocks. We also favor the industrials and consumer discretionary sectors, offset by underweight positions in consumer staples and utilities as part of our opportunistic equity sector guidance.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data: FactSet.} 

• Stocks finish mostly lower as uncertainties persist - Markets remain on edge as the Iran conflict continues, with sentiment swinging on headlines and moves in oil. WTI crude rose nearly 4% to around $92 amid mixed signals on how long the conflict may last. Reports indicate the Pentagon is preparing to deploy roughly 3,000 troops to the Middle East, even as the U.S. administration is reportedly discussing the possibility of peace talks as early as Thursday. Small- and mid-cap stocks outperformed and ended higher on the day, while technology—particularly software—lagged amid renewed concerns about AI‑driven disruption. Bond yields climbed to multi‑month highs, with the 10‑year Treasury reaching 4.40%, its highest level since July, as investors debate how central banks will respond to an energy‑driven rise in inflation. Meanwhile, gold erased its premarket gains following reports that Turkey may tap its reserves to defend the lira.
   
• Survey data offer an early read on the conflict’s economic impact - The global preliminary Purchasing Managers' Index (PMI) data for March released today provided an initial assessment of how the conflict is weighing on growth and inflation. In the U.S., the data was mixed, with manufacturing activity surprising to the upside but with services activity falling to the lowest in 11 months. In the eurozone, the flash PMIs and consumer confidence declined in March. While the drop was expected given the spike in energy prices and elevated uncertainty, the fall in consumer confidence was the sharpest since the Russian invasion of Ukraine in 2022. The conflict is both growth-negative and inflation-positive, but we think that overall economic resilience should hold, with the duration of the conflict remaining the key variable. While there is no recent precedent for the scale of this energy disruption, U.S. oil prices have reached, and in some cases exceeded, current levels several times over the past 15 years without tipping the economy into recession*. Oil prices today are trading at comparable levels to 2011-2013 and 2022, but the underlying fundamentals are stronger, in our view. Consumers’ disposable income has nearly doubled since 2011, household debt relative to income remains low, and unemployment is still low by historical standards. At the same time, the ongoing AI investment boom and continued innovation are providing an additional source of support for growth.
   
• Fed on hold as it performs a balancing act - Amid the current energy shock, the Federal Reserve must balance downside risks to the labor market against upside risks to inflation. Historically, central banks have tended to look through temporary spikes in oil prices. But with inflation running above target for five years, the latest surge in energy costs complicates that stance. At last week’s meeting, the Fed avoided major changes, maintaining one rate cut in its forecast—signaling a willingness to look through a one‑time boost to inflation. Unlike in 2022, when energy prices surged after Russia’s invasion of Ukraine, today’s labor market is no longer tight, policy is no longer highly accommodative, and fiscal stimulus is modest. We believe rate cuts are delayed, not derailed, and we would look to lock in high yields in intermediate‑ and long‑term bonds if the 10‑year approaches 4.5%.

Angelo Kourkafas, CFA ;
Investment Strategy

^{Source for all data not cited: Bloomberg. 
Cited sources: * International Energy Agency}

• Stocks trade higher on signs of de-escalation in the Middle East – U.S. equity markets traded higher Monday, with the S&P 500 gaining over 1% after President Trump announced that the United States would halt strikes on Iranian energy infrastructure for five days following productive conversations with Iran over the weekend. Market leadership was broad-based, with all 11 sectors of the S&P 500 closing higher, while growth-oriented sectors such as technology and consumer discretionary outperformed. European equity markets also rallied on the news, with the Euro Stoxx 50 Index closing up more than 1%. Bond yields were modestly lower, with the 10-year Treasury yield declining to 4.35%, while the U.S. dollar index weakened against a basket of currencies. In commodity markets, oil prices declined roughly 10%, closing below $90 per barrel.
   
• Signs of de-escalation spark rally in equity markets – Global equity markets traded higher following signs of de-escalation in the Middle East conflict. Over the weekend, rhetoric intensified, with U.S. President Trump threatening to target Iranian energy and power infrastructure if the Strait of Hormuz was not reopened by Monday evening. Early Monday morning, however, President Trump announced that, following productive conversations with Iran, the United States would postpone any strikes for five days to allow for further negotiations. Markets responded positively to the shift in tone, with equities moving higher while crude oil prices declined. Although this change in rhetoric is an encouraging development, we think the clearest indication of meaningful de-escalation will be whether crude oil flows through the Strait of Hormuz are able to recover. Roughly 25% of the world’s seaborne oil trade passes through the strait, underscoring its importance to global energy markets. ¹ Headlines remain fluid, and market volatility could persist in the days and weeks ahead. Even so, we continue to believe that a healthy economic backdrop creates attractive opportunities across global equity markets. In particular, we see compelling opportunities in U.S. large- and mid-cap equities, as well as in developed international small- and mid-cap equities and emerging-market equities.
   
• March performance check-in – Global equity markets have stumbled in March as the conflict in Iran has driven crude oil prices more than 30% higher, weighing on overall risk sentiment. Through Friday’s close, the S&P 500 had fallen 5.4% for the month, while the Russell 2000 small-cap index was down more than 7%. Still, U.S. equities have outperformed on a relative basis, with international equities down roughly 10% over the same period. The United States has been a net exporter of energy products since 2019, which may offer some insulation from supply disruptions. By contrast, regions such as Asia and Europe remain more reliant on imported energy to meet demand. Despite the March pullback, international equities remained modestly positive year-to-date through Friday’s close. In fixed income, U.S. investment-grade bonds are down just over 2%, as rising Treasury yields have weighed on returns.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data not cited: FactSet. 
Cited sources: 1. International Energy Agency
International stocks represented by MSCI AC World ex USA Index.} 

• Stocks close lower amid geopolitical uncertainty and higher bond yields – U.S. equity markets closed sharply lower on Friday, weighed down by rising bond yields and persistent geopolitical uncertainty. The 10-year Treasury yield closed just below 4.4%, up from below 4.0% at the end of February, as higher oil prices have pushed inflation expectations higher and reduced expectations for Federal Reserve rate cuts. On the geopolitical front, oil prices edged higher amid continued uncertainty over the duration of the conflict, following reports that the U.S. is increasing military support in the Middle East. In terms of market leadership, energy and financials were the only S&P 500 sectors to finish higher, while interest-rate-sensitive sectors such as utilities and real estate, along with growth-oriented sectors such as technology, were among the laggards. The U.S. dollar strengthened against a basket of currencies and has risen by roughly 2% in March, reflecting its traditional role as a safe-haven asset during periods of uncertainty.
   
• Earnings expectations holding steady despite uncertainty – The conflict involving Iran has contributed to recent market volatility, with the S&P 500 closing 5% below its January 27 all-time high yesterday. That said, we would remind investors that volatility and market pullbacks are a normal part of investing and that, historically, geopolitical conflicts have generally had only a short-term and limited effect on financial markets. On average, the S&P 500 experiences approximately three 5% pullbacks and one 10% pullback each calendar year.** Meanwhile, expectations for earnings growth in 2026 remain constructive. S&P 500 earnings are projected to grow by nearly 17% in 2026, supported by continued strength in the technology sector. Earnings growth is expected to be healthy overseas as well, with MSCI ACWI ex USA earnings forecast to rise by nearly 18% this year. In our view, opportunities in equity markets remain attractive, and we continue to favor U.S. equities, emerging-market equities, and developed international small- and mid-cap equities.
   
• Global monetary policy in focus – Monetary policy was in focus this week, as central banks in the U.S., Canada, Japan, the euro zone, and the United Kingdom all concluded their March meetings and opted to leave policy rates unchanged. Global bond markets were under pressure following a shift in tone from the Bank of England (BoE). While the BoE’s February monetary policy summary suggested a path of gradual easing, the March summary struck a more hawkish tone, removing commentary around expectations for future rate cuts and instead emphasizing the need to return inflation to its 2% target. The U.K. 2-year government bond yield rose 0.26% yesterday and has increased more than 0.7% this month. The Bank of Canada and the European Central Bank each struck a more measured tone, underscoring a wait-and-see approach, while the Bank of Japan signaled that it would likely continue raising interest rates if economic activity evolves broadly in line with its expectations. In the U.S., the Federal Reserve also released an updated set of economic projections at this week’s meeting, raising its forecasts for headline and core inflation in 2026, citing upward pressure on goods prices from tariffs and higher oil prices.* Despite the firmer inflation outlook, policymakers maintained their projection for one interest-rate cut in 2026.* In our view, the Fed’s rate-cutting cycle remains intact but has likely been delayed, with cuts now unlikely until later in 2026 or 2027.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data not cited: FactSet. 
Source for data cited: *Federal Open Market Committee, March 2026 Summary of Economic Projections
**FactSet, Edward Jones.}