March Market Recap
War dominated the headlines and drove global equities meaningfully lower in March. Uncertainty about the duration of America’s involvement in Iran as well as the energy shock it created led to spiking volatility and falling stock prices.
The most immediate economic impact from the war has been more expensive oil. West Texas Intermediate Crude rose from $67 per barrel one month ago to as high as $107 per barrel in late March. Brent Crude increased from $72 per barrel to $119 over the same period. The effect on US gasoline prices has been significant. According to AAA, the average cost for unleaded gas as of April 1 was $4.06 per gallon (up 36% from a month ago). Diesel fuel increased even more (+46%).
All three major equity benchmarks lost roughly 5% last month, ending a 10-month winning streak for the Dow Jones Industrial Average. Surging oil prices meant Energy (+10.3%) was the best performing market sector in March. The other 10 sectors in the S&P 500 all lost at least 3.4%. Industrials (-8.5%) and Health Care (-8.3%) slumped the most.
Benchmark Returns: March 2026 | YTD 2026
|
Dow Jones
|
S&P 500
|
NASDAQ
|
-5.38% | -5.58%
|
-5.09% | -4.63%
|
-4.75% | -7.11%
|
|---|
It was February 28 when the US Air Force and Israeli military began a coordinated bombing of military targets in Iran, although US equities proved resilient during the first two weeks of the conflict. The S&P 500 fell only 3.5% in the first half of March, due in large part to optimism for a quick resolution. Stock losses accelerated from there, however. The S&P’s monthly losses exceeded 8% until a strong rally on March 31. The last time US equities lost more than 8% in a month was September 2022 (S&P 500 -9.3%).
Wars and geopolitics often result in energy spikes, but the supply shocks are even bigger this time. Roughly 20% of the world’s oil and 20% of its liquified natural gas flow through the Strait of Hormuz, which Iran has effectively closed to commercial shipping. How long this crucial waterway remains unsafe has become the most important economic question looming over the war. The longer it takes to reopen, the larger and more lasting the impact on the global economy.
All of this has renewed concerns about rising inflation and the monetary policy that could follow. We began the year with expectations of perhaps two rate cuts from the US Federal Reserve, but the latest projections assume none at all. The Fed made no changes to interest rates following its March 17-18 meeting and Fed Chair Jerome Powell later said the central bank is “in a good place for us to wait and see” how higher energy prices ripple through the economy.
International stocks performed worse than US equities in March due to their geographic proximity to the war and the fact that most foreign countries (unlike the United States) are net importers of energy. Non-US Developed equities fell 7.8% last month but were still positive overall in Q1 (+1.2%). Emerging Market equities, which tend to be even more sensitive to energy shocks, fell 9.3% in March but gained 3.8% in Q1. Small-cap US stocks performed in-line with large-caps last month (Russell 2000 -5.2%) but increased 0.6% year-to-date.
With Fed hikes seemingly off the table this year, it made sense for bond yields to move higher. Ten-year US Treasuries ended March yielding 4.31% (up from 3.96% a month earlier) and climbed as high as 4.48% mid-month. Yields on two-year US Treasuries also spiked as high as 4.03% (compared to 3.38% at the end of February).
The next round of corporate earnings reports will begin in mid-April with a sharp focus on how the war has impacted forward-looking revenue and profit guidance for American companies. The forward Price-to-Earnings (P/E) ratio of the S&P 500 has fallen to 19 as of March 31, down from 23.1 six months ago. The “P,” in other words, has already decreased significantly. We will soon find out about the “E.”
Ben Marks
Chief Investment Officer
Brett Angel
Senior Wealth Advisor
Investment Advice offered through Marks Group Wealth Management, a Registered Investment Advisor.
Marks Group Wealth Management performs in-house analysis on companies. Statistical information on mentioned companies is obtained from company reports, news releases and SEC filings. The information set forth herein has been derived from sources believed to be reliable, but is not guaranteed as to accuracy and does not purport to be a complete analysis of the securities, companies or industries involved. Opinions expressed herein are subject to change without notice. Additional information is available upon request.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments and strategies may be appropriate for you, consult with us at Marks Group Wealth Management or another trusted investment adviser. Mention of individual equities in this commentary are for informational purposes only and are not intended to represent a recommendation.
Stock investing involves market risk including loss of principal. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. International and emerging market investing involves special risks such as currency fluctuation and political instability. These risks are often heightened for investments in emerging markets. No strategy assures success or protects against loss. Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.
Past performance is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.
The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.
Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price to-book ratios and higher forecasted growth values.
Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.
The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.
MSCI EAFE Index consists of the following developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.
VIX-The Chicago Board Options Exchange’s CBOE Volatility Index, a popular measure of the stock market’s expectation of volatility based on S&P 500 index options. It is calculated and disseminated on a real-time basis by the CBOE, and is often referred to as the fear index or fear gauge.
