Market Commentary Q1 2026

After a strong finish to 2025, the first quarter of 2026 brought a different kind of “March Madness” to the markets. While NCAA college basketball brackets were being busted on the court, investors were navigating a wave of volatility driven by geopolitical tensions, shifting interest rate expectations, and a changing economic backdrop. The quarter began with optimism and new market highs, but as conditions evolved, markets were reminded that the path forward is rarely a straight line.

What Drove Markets This Quarter

Markets entered 2026 with optimism, briefly reaching new highs early in the quarter. However, that feeling shifted as geopolitical tensions escalated, most notably with conflict in Iran, introducing uncertainty and pushing oil prices higher.

Rising energy prices brought inflation back into focus, which led investors to reassess expectations for interest rate cuts. Areas of the market that had benefited most from lower-rate expectations, particularly technology and growth stocks, faced increased pressure as a result.

From its peak, the S&P 500 experienced a notable pullback before recovering slightly toward quarter-end, ultimately finishing modestly lower for the period. At the same time, the Federal Reserve held interest rates steady. 

While geopolitical events like this can feel unsettling, history provides important context. Markets have consistently shown resilience following periods of conflict, even if short-term volatility increases. In the link below, you can view and download a brief piece exploring how markets have responded to major global conflicts over time—including periods like World War II, the Gulf War, and more recent events.

View & Download: Market Resilience During Global Conflicts

This perspective reinforces an important point: while uncertainty can drive short-term market movement, long-term outcomes have historically been far more resilient than headlines might suggest.

Opportunity Across the Market 

One of the more constructive developments this quarter has been a broadening of market performance. After a period where returns were heavily concentrated in a small group of large technology companies, we’ve begun to see more balance across the market. Value stocks, small-cap companies, and international equities have held up relatively better in 2026. 

This type of rotation is healthy. It reflects a market that is adjusting and evolving. It also reinforces the importance of diversification, ensuring portfolios are positioned to participate in opportunities across different sectors, regions, and company sizes.

Staying Grounded in Your Approach

History has consistently shown that reacting to short-term uncertainty, whether driven by headlines, geopolitical events, or market swings, can be detrimental to long-term outcomes. Missing even a small number of strong market periods can have a meaningful impact on overall returns. An illustration of what missing the best consecutive days looks like is provided below.

A disciplined approach grounded in diversification, thoughtful planning, and a long-term perspective remains the most reliable way to navigate uncertainty.

Market Summary

Quarter 1 (January 1, 2026 – March 31, 2026) & Year-to-Date Index Returns

Where You’re Invested Matters

At Petersen Hastings Wealth Advisors, we believe your financial life is about more than market performance. While markets will always move through periods of uncertainty, what matters most is staying aligned with what you’re truly invested in—your goals, your family, and your future.

That’s why our approach is built around more than just portfolios. Through our discovery process, we take the time to understand what’s most important to you, so your financial plan reflects not just where your money is invested, but where your life is invested. 

In times like these, our role is to provide clarity and perspective to help you stay focused on the bigger picture rather than short-term noise.

We continue to:

• Build globally diversified portfolios designed for long-term success.
• Make thoughtful, disciplined decisions—not reactive ones.
• Align every recommendation with your personal vision and goals.

Because successful investing isn’t about predicting the next headline, it’s about staying committed to a plan that supports the life you want to live.