March 2026 Market Review & Commentary

We hope you're enjoying the early signs of spring. In Northern Virginia, the cherry blossoms are in bloom—a clear sign that we are turning the corner from winter into a busier spring season. With spring break wrapping up for many families, this time of year often brings a return to routines, outdoor activities, and full schedules.

Down in Georgia, spring brings a few familiar constants: azaleas in full bloom, a steady layer of yellow pine pollen covering everything in sight, and the Gough family spending plenty of time at the soccer fields as the season hits its halfway point.

Market Update

March proved to be a more volatile month, closing out a first quarter that saw a meaningful shift in market leadership. The S&P 500 declined during the month, finishing the quarter down approximately -4.3%, while the Nasdaq experienced further pressure, ending the quarter down closer to -5.8%.

While those headline numbers reflect a challenging environment, they do not tell the full story. Beneath the surface, broader areas of the market held up better, with smaller companies and value-oriented investments outperforming large-cap growth stocks. This type of rotation is notable, as it represents a shift away from the narrow leadership we have seen over the past couple of years.

At the sector level, Energy was the clear leader during the quarter, benefiting from rising oil prices. More defensive areas such as Utilities and Consumer Staples also held up well, reflecting a shift toward stability within the market.

What Drove the Market

Two primary themes influenced markets throughout March and the first quarter:

1. Rising Oil Prices & Geopolitical Tension

Escalating tensions in the Middle East and the closure of the Strait of Hormuz led to a sharp increase in oil prices, which rose significantly during the quarter. This has direct implications for inflation and has caused markets to reassess expectations for interest rate cuts moving forward.

2. Continued Evolution of Artificial Intelligence (AI)

While AI remains a long-term growth driver, recent developments have caused investors to rethink which companies stand to benefit—and which may face disruption. This led to increased volatility, particularly within technology and growth sectors.

Looking Ahead

As we move into the second quarter, markets are closely watching a few key areas:

• Inflation data, particularly as higher energy prices begin to work through the economy

• Federal Reserve policy, with expectations for rate cuts becoming less certain

• Ongoing geopolitical developments, which may continue to influence short-term market direction

While these factors may create continued volatility, it is important to remember that market pullbacks driven by uncertainty are a normal part of the investment cycle. Notably, underlying corporate earnings expectations remain stable, which is a key driver of long-term market performance.

Our Approach

Periods like this reinforce the importance of maintaining a diversified portfolio and focusing on long-term objectives rather than short-term headlines. As highlighted this quarter, diversifying across different market areas and asset classes helped reduce the impact of volatility compared to broad market indexes.