The major large-cap US indices (S&P 500, NASDAQ, and Dow) were lower in the first quarter of 2026 along with growth indices which were also lower across the market cap spectrum. Economic data continued to support the narrative of a resilient economy, with the unemployment rate ticking down to 4.3% in March, initial jobless claims hovered around the 200K level, and Core CPI coming in cooler than expected. In February, ISM Services also rose to levels not seen since October 2024. Despite these positive indicators, Consumer Confidence dropped primarily due to concerns about jobs and inflation. December pending home sales declined, falling approximately 9% month-over -month.
Geopolitical volatility influenced market sentiment. The US captured Venezuelan President Nicolas Maduro and subsequently gained significant influence over the country’s oil export flows. Tensions with European/NATO allies intensified as President Trump pursued a bid to purchase Greenland and threatened tariffs, although a framework deal with NATO ultimately eased some concerns. Late February marked the start of the war with Iran. Uncertainty around the effects and timing of the closing of the Strait of Hormuz remain one of the most significant factors.
Trade policy emerged as a focal point when the Supreme Court ruled 6-3 against President Trump’s use of emergency tariff powers under the International Emergency Economic Powers Act. In response, the White House instituted a new 10% “global tariff” with discussions of potentially increasing it to 15%. February saw international trade jump back into the narrative, contributing to market volatility and uncertainty.
Monetary policy remained central, with the Federal Reserve holding rates unchanged at its January meeting, with some economists suggesting rates would likely stay on hold through Powell’s tenure. Political developments further shaped the landscape, as the Justice Department launched a criminal investigation into Fed Chair Powell regarding building renovations, and President Trump nominated former Fed Governor Kevin Warsh as the next head of the central bank.
The “Main Street > Wall Street” narrative persisted, driven by the White House affordability campaign. Key proposals included banning large institutional investors from buying single-family homes and implementing a temporary 10% cap on credit card interest rates.
Sector and industry performance varied widely. Semiconductors outperformed software by wide margin in January, reflecting one of the largest performance gaps between the two sectors recent history. Precious metals experienced volatility, with gold logging its eighth consecutive month of gains and silver rose in earlier January before posting a 31.4% single-day decline on January 30. February saw further treasury market strength, with the 10-year yield dropping 30 basis points to below 4%.
The quarter’s corporate earnings season was strong. The S&P 500 recorded 14.0% year-over-year earnings growth for Q4, marking the fifth consecutive quarter of double-digit growth. This performance was well ahead of the 8.3% expected at the beginning of the quarter. Despite market volatility and sector rotation, we continued to see a resilient economic backdrop and robust corporate results.
Authored by Kimberly Woody
For more news, information, and analysis, visit the ETF Strategist Content Hub.
This report has been prepared for informational purposes only. It may include content generated or assisted by artificial intelligence (AI) tools. While the information presented is based on sources believed to be reliable, it should not be construed as personalized investment advice, considered a recommendation or solicitation for the purchase or sale of any security or strategy. Strategy Holdings, Attributions and or Sectors mentioned are as of the date indicated, subject to change, and should not be relied upon as current. This does not constitute legal or professional advice and is not tailored to the investment needs of any specific investor. Registration of an investment adviser does not imply any certain level of skill or training. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information may be required to make informed investment decisions, based on your individual investment objectives and suitability specifications. Investors should seek tailored advice and should understand that statements regarding future prospects of the financial market may not be realized, as past performance does not guarantee and/or is not indicative of future results. Content may not be reproduced, distributed, or transmitted in whole or in part by any means without written permission from Globalt. Regarding permission, as well as to receive a copy of Globalt’s Form ADV Part 2 and Part 3, contact Globalt’s Chief Compliance Officer, 3200 Windy Hill Road SE, Suite 1550E, Atlanta GA 30339. You can obtain more information about Globalt Investments and its advisers via the Internet at adviserinfo.sec.gov, sponsored by the U.S. Securities and Exchange Commission. The opinions and some comments contained herein reflect the judgment of the author, as of the date noted.
Globalt Investments LLC (“Globalt” or the “Firm”) was founded in 1990. It has been registered with the SEC as an Investment Adviser pursuant to the Investment Advisers Act of 1940 since 1991. Effective October 1, 2023, Globalt is a limited liability company owned by the employees and succeeding the “Globalt Investments” which had been a separately identifiable division of Synovus Trust Co. N.A. (its former affiliate since 2002). Globalt is no longer affiliated with Synovus. Globalt’s registration with the SEC does not imply any level of skill or training and should not be mistaken for an endorsement.
