Monthly Market Report: First Quarter 2026 Review

Index	1 Month %	Year To date %	One Year %
S&P 500 Total Return	-4.98	-4.33	17.80
NASDAQ Composite**	-5.09	-7.11	23.73
S&P Developed Ex-US BMI*	-11.19	-0.05	27.75
Dow Jones Commodity (DJCI)	13.46	26.87	34.65
S&P US Aggregate Bond*	-1.77	-0.11	4.43

March Market Recap

The financial markets navigated a complex and turbulent landscape during the first quarter of 2026. Global sentiment was dictated by a volatile mix of geopolitical instability, shifting macroeconomic expectations, and structural concerns within the technology and private credit sectors. While the quarter concluded with a corrective relief rally, the underlying trend reflected a significant repricing of risk across both equity and fixed-income assets.

Equity Market Performance

U.S. equities faced a challenging three-month period, characterized by a "trifecta" of headwinds: escalating tariff-related anxieties, renewed skepticism regarding Artificial Intelligence (AI) valuations, and mounting liquidity concerns in private credit markets.

• Large-Cap Volatility: The S&P 500® closed the quarter down 4%, marking its weakest quarterly performance since the third quarter of 2022. Despite a late-March rally of 4.98% that recouped some losses, the index remained under pressure for much of the period.

• Tech Retrenchment: The NASDAQ Composite bore the brunt of the "AI jitters" and higher-for-longer interest rate expectations, falling 5.09% in March and ending the quarter down 7.11% YTD. Heavyweight sectors—including Information Technology, Communication Services, and Consumer Discretionary—suffered significant losses.

• Size Rotation: A notable divergence occurred as investors rotated toward smaller-cap stocks. While not immune to the March selloff, the S&P MidCap 400® and S&P SmallCap 600® demonstrated relative resilience, finishing the quarter with gains of 3% and 4%, respectively.

• Sector Leadership: Energy was the standout performer, surging 38% in Q1. Driven by soaring oil prices and geopolitical tensions, it was the only sector to post positive returns in March. Conversely, Financials lagged the broader market as private credit worries weighed on sentiment.

  
  

Fixed Income and Commodities

The fixed-income market mirrored the equity market’s unease, primarily driven by a shift in monetary policy expectations.

• Bond Market Pressure: Hopes for Federal Reserve rate cuts largely dissipated in March as stagflation fears took hold. The S&P US Aggregate Bond Index declined 1.77% in March, bringing its year-to-date return to a slight negative 0.11%.

• Commodity Surge: Commodities acted as a primary hedge against inflation and geopolitical risk. The Dow Jones Commodity Index (DJCI) saw a massive influx of capital, rising 13.46% in March and finishing the quarter up 26.87% YTD. This move was heavily influenced by the reignition of conflict in the Middle East and its subsequent impact on energy supplies.

  
  

Macroeconomic Outlook

The quarter’s narrative was heavily influenced by the transition from "disinflation optimism" to "stagflation anxiety." The combination of resilient energy prices and geopolitical friction has complicated the Federal Reserve’s path toward normalization. While the strong relief rally on the final trading day of March suggests a degree of oversold conditions, the market remains sensitive to upcoming inflation data and the evolving trade environment.

Key Takeaway: Q1 2026 served as a period of significant transition, where the dominance of "Big Tech" was challenged by a resurgence in "Old Economy" sectors like Energy and a flight to hard assets via the commodity complex.

Source: S&P Dow Jones Indices LLC and/or its affiliates. Data as of  March 31, 2026, except * as of  March 30, 2026. Index performance based on total return (USD). Past performance is no guarantee of future results.

**NASDAQ  Data as of  March 31, 2026  Overview for COMP

Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor. Stratos Wealth Advisors and Synergy Wealth Management are separate entities.