March 2026 Market Update

As of March 2026

Macroeconomics

Economic data was generally stable given geopolitical turmoil. The Job Openings and Labor Turnover Survey (JOLTS) program of the Bureau of Labor Statistics (BLS) showed little change at 6.9 million job openings in February, while January was revised upwards to 7.2 million. According to payroll processing firm ADP, private companies added 62,000 jobs in March, which is above the economic forecast of 40,000. The Conference Board Consumer Confidence Index survey edged up in March to 91.8 as pessimistic expectations eased again despite concerns over rising costs from tariffs and oil evident in inflation expectations. The U.S. dollar index as measured by DXY regained strength as a safe-haven asset in times of turmoil, up 2.4 percent for the month.

At the March meeting, the Fed held the benchmark rate steady at 3.5-3.75 percent for the second consecutive month. The central bank continues to closely monitor persistent inflationary pressures and moderating labor market growth and projected a 2026 median headline PCE (Personal Consumption Expenditures) at 2.7 percent. Follow-on comments from FOMC members indicated a wait-and-see approach regarding the Persian Gulf conflict’s impact on the economy that could signal as little as one possible rate cut during the year. Powell was quoted as saying that while inflation remained “elevated” he still expects lower rates later in the year.

Equity markets

Markets ended the month on a surge, with the final trading day seeing sharp gains following a period when major indices were either in or approached correction territory. The S&P 500 Index returned -5.0 percent for the month, and the market experienced macro-related volatility as the VIX jumped to 31 percent in the last week before settling down to 25 percent at month end. Sector performance was notably divergent, with only Energy (+10.4 percent) in positive territory, while all other sectors were negative with Industrials (-8.4 percent) the weakest. All major indices were negative during the month as small-capitalization stocks matched large-cap, while mid-cap trailed both. Value narrowly outpeformed growth on a relative basis and equal‑weight indices underperformed cap‑weighted counterparts.

International equity markets significantly underperformed the U.S. this month, with emerging markets (EM) down -13.1 percent and developed markets (EAFE) down -10.3 percent. Regionally, Europe (-9.8 percent) led developed markets, while Far East (-11.5 percent) performed the worst. Latin America (-4.3 percent) led emerging markets, while Asia (-14.3 percent) trailed all. Notable country returns had the U.K. (-7.7 percent) leading major developed markets, while Brazil (-1.8 percent) took the top spot in emerging economies.

Fixed income markets

Fixed income markets also slumped, with the Bloomberg U.S. Aggregate Index down -1.8 percent. The U.S. Treasury yield curve flattened as yields rose across the spectrum from 2-years to 30-years amid mounting global risks and anticipation of ongoing restrictive monetary policies. Global bond yields rose following the surge in energy prices as central banks signaled possible interest rate action to curb related inflationary pressures. Investment-grade (IG) corporates, high yield, and asset-backed securities spreads widened throughout the month as part of the flight-to-quality.    

Looking ahead

This month's market losses reflected escalated uncertainty about energy prices, inflation trajectories, and global growth. With key inflation data still pending and geopolitical risks elevated, future direction will likely depend on further developments in the Middle East and central bank responses to energy-driven price pressures and resulting economic headwinds. While equities remain highly sensitive to headline news and ongoing volatility is anticipated over the near term, resilient corporate earnings and consumer sentiment, along with a Fed that is highly focused on price stability, provides some positive perspective.