Your Monthly Market Newsletter, MARCH2026

As we move into March, the U.S. stock market is recovering with significant late-month losses, much of which has been caused by AI disruption fears and inflation report that reversed previous gains. The S&P 500 and Nasdaq finished in red for February, fueling existing fears about the impact of artificial intelligence. Additionally, January’s producer price index showed a 0.5% increase for the month. 

U.S. consumer sentiment showed a slight improvement but remained significantly below 2025 levels due to persistent inflation concerns. High prices continue to erode purchasing power, while labor markets and trade policy kept overall confidence.

Wishing you a wonderful start to the spring season! If you have any questions, please do not hesitate to reach out.

Stocks

Returns were bittersweet in February, with the tech-oriented NASDAQ selling off over -2.26%, giving up its returns from January. The S&P 500 also fell -0.76% and also entered negative territory on the year. Defensive stocks and value stocks performed well, which drove the Dow Jones up 0.31%. Outside of the major indices, small companies and international companies both performed well for the month of February. The selloff among tech came as many companies were seen as replaceable by artificial intelligence (AI). Outside of tech, however, strong earnings and economic growth point towards a strong stock market, continuing the rally seen in the past few years. 

Sector Performance

Seven of the eleven sectors of the S&P 500 were positive in February. Defensive sectors like Utilities, Materials, and Energy all performed well, while Technology and Communication Services sold off. In addition to the selloff in primarily software companies, the announcement that a majority of Trump’s previously imposed tariffs were struck down by the Supreme Court also drove markets forward in February. While lower tariffs are expected to be beneficial for corporations, the Court’s ruling also injected uncertainty back into the global trade arena.  Despite localized weakness, five of the eleven sectors have already posted double digit gains through the first two months of the year. 

Bonds

Fixed income markets were broadly positive in the second month of the year, providing a welcome method of diversification from equities. The announcement that Kevin Warsh was Trump’s nominee to run the Federal Reserve (Fed) quelled the anxieties around the Fed losing its independence from the White House. An independent Fed means monetary policy that is focused solely on managing inflation and unemployment levels.  The yield on 2-year Treasury bonds fell -0.15%, and the 10-year yield fell -0.29%. As yields moved down, bonds prices rose given the inverse relationship between interest rates and bond prices. Long duration bonds performed even better given the multiplier effect that duration has on interest rate changes.

Economic Update

The U.S. economy seemed to remain on a solid footing in February. The labor market proved its resilience, adding 130,000 jobs and surpassing expectations, while the unemployment rate fell back to 4.3%. GDP came in lower than expected for the fourth quarter of 2025, mainly due to a sharp decrease in government spending from the government shutdown, which lasted roughly half of the fourth quarter. Progress on inflation was mixed, with the most recent CPI and PCE reports contradicting each other. CPI cooled to 2.4%, but PCE showed inflation rising modestly to 2.9%. Regardless, both numbers are still above the 2% target set by the Fed. February also marked the first time in over a year that the ISM Manufacturing and Services readings expanded in lockstep, adding to the idea that the economy continues to build momentum. 

Reemergence of Giant Tortoises in the Galapagos Islands

For the first time in two centuries, giant tortoises are reappearing on the Galapagos Islands. The Floreana tortoise was driven to extinction in the mid‑1800s due to heavy exploitation by whalers, but in 2000, ecologists discovered a hybrid tortoise carrying Floreana ancestry. That finding sparked a selective breeding program aimed at restoring and maximizing the species’ original genetic line.

This past month, the program achieved a significant milestone by reintroducing 158 giant tortoises to their natural habitat on Floreana. This restoration effort is expected to benefit both the species and the island’s ecological health.

“Giant tortoises are a critical part of this [ecosystem],” said Rakan Zahawi, executive director of the Charles Darwin Foundation. “By dispersing seeds, shaping vegetation, creating microhabitats … and influencing how landscapes regenerate, they help rebuild ecological processes that many other species depend on.”

For more details on this incredible story, read here.

THOUGHT FOR THE MONTH

^{Index Definitions}

^{Dow Jones Industrial Average:The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.}

^{Dow Jones U.S. Real Estate Total Return Index:The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.}

^{NASDAQ Composite:The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector.} 

^{S&P 500 Bond Index:The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.}

^{S&P 500 Consumer Discretionary:The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.}

^{S&P 500 Consumer Staples:The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.}

^{S&P 500 Energy:The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.}

^{S&P 500 Financials:The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.}

^{S&P 500 Index:The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.}

^{S&P 500 Utilities:The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.}

^{S&P U.S. Aggregate Bond Index:The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.}

^{S&P U.S. Treasury Bond Index:The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.}

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