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Market Indices | |
At-A-Glance | |
For the Month All three major indices declined in March, with the Dow Jones Industrial Average leading the sell‑off, down 5.2%. The S&P 500 fell 5.0%, while the tech‑heavy Nasdaq Composite fared slightly better, declining 4.7%. Small‑cap stocks also ended the month lower, with the Russell 2000 down 5.0%. For the Quarter
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March & First Quarter 2026 | |
In a stark resemblance to last year, the S&P 500 reached an all‑time high in the first half of the quarter before retracing and ending down 4.3% amid escalating Middle East tensions. The quarter began with Technology stocks underperforming the broader market after an AI company launched an enterprise‑focused model capable of replacing core workflow functions, reviving concerns about disruption to traditional software providers. This sector‑specific weakness later spread to the broader market following a U.S.–Israel coalition strike on Iranian military targets, which triggered a wider regional escalation as Iran targeted neighboring Gulf countries and restricted shipping through the Strait of Hormuz. With more than 20% of global oil supply effectively disrupted, investor sentiment shifted from confidence supported by a strong economy to concerns that rising energy prices and supply‑chain disruptions could fuel inflation and weigh on economic momentum. Tariffs re‑emerged as a market focus this quarter. The Supreme Court ruled that President Trump’s emergency tariffs were an overreach and decided to invalidate a large portion of existing global tariffs. In response, the administration announced a temporary additional 10% tariff under Section 122 of the Trade Act of 1974, to remain in effect for 150 days. On the economic front, the Federal Reserve held interest rates steady this quarter at 3.50%–3.75%, citing elevated inflation risks stemming from higher energy prices and a stabilizing labor market. The U.S. economy added 38,000 jobs over the first two months of the year, with the unemployment rate holding at 4.4%. Maintaining a diversified portfolio with exposure to mid and small‑cap equities as well as international markets helped limit losses and reduce volatility during the quarter. The Russell 2000 Index outperformed the broader markets increasing 0.9% and outperformed the S&P 500 by 5.2%. International equities also held up relatively well, with the MSCI EAFE Index down 1.2% but still outperforming the S&P 500 by 3.1%. Emerging markets were relatively flat for the quarter, as strong gains in Brazil (+19.1%) and Korea (+16.5%) were largely offset by a sharp decline in India which fell 18.1%. Value stocks outperformed in both March and over the quarter. Large‑cap Value gained 2.1% for the quarter, outperforming Large‑cap Growth, which declined 9.8. Concerns that AI could disrupt traditional software business models drove a sharp correction in Growth stocks, while more defensive Value stocks proved relatively resilient amid rising market volatility. In small‑caps, Value continued to lead Growth, outperforming by 7.8%. | |
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Top & Bottom Performers | |
Energy sector was the top performing sector for the first quarter, up 38.3%. Materials and Utilities were up 9.7% and 8.3%, reinforcing a rotation away from growth. Financials and Consumer Discretionary were the worst performing sectors, down 9.4% and 9.2% for the quarter. | |
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In fixed‑income markets, U.S. Treasurys—as measured by the Bloomberg U.S. Government Bond Index—fell 1.7% in March but remained relatively flat for the quarter. Longer‑term bonds underperformed, declining 4.0% during the month and 0.4% for the quarter, as rising energy prices reignited inflation concerns. In other fixed-income assets, investment-grade bonds of all types (as measured by the Bloomberg U.S. Aggregate Bond Index) remained flat for the first quarter while High-Yield corporate bonds fell 0.5%. | |
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This report is created by Cetera Investment Management LLC. For more insights and information from the team, follow @CeteraIM on X. |
About Cetera® Investment Management
Cetera Investment Management LLC (CIM) is a Securities and Exchange Commission registered investment adviser owned by Cetera Financial Group® (CFG). CIM provides market perspectives, portfolio guidance, model management, and other investment advice to its affiliated broker-dealers and registered investment advisers.
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“Cetera Financial Group” (CFG) refers to the network of independent retail firms encompassing, among others, those that are members FINRA/SIPC; Cetera Advisors LLC, Cetera Wealth Services, LLC (f/k/a Cetera Advisor Networks), Cetera Investment Services LLC (marketed as Cetera Financial Institutions or Cetera Investors), and Cetera Financial Specialists LLC. Those that are Securities and Exchange Commission registered investment advisers; Cetera Investment Management LLC and Cetera Investment Advisers LLC, .CFG is located at 655 W. Broadway, 11th Floor, San Diego, CA 92101.
Avantax Planning Partners, Inc. is an SEC registered investment adviser within the Aretec Group, Inc. (dba Cetera Holdings). All of the referenced entities are under common ownership
Disclosures
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Glossary
The Bloomberg Barclays Capital U.S. Aggregate Bond Index, is a broad based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government–related and corporate debt securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency) debt securities that are rated at least Baa3 by Moody’s and BBB- by S&P. Taxable municipals, including Build America bonds and a small amount of foreign bonds traded in U.S. markets are also included.
The Bloomberg Barclays US Municipal Bond Index covers the USD-denominated long-term tax exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and prerefunded bonds. Eligible securities must be rated investment grade (Baa3/BBB- or higher) by Moody’s and S&P and have at least one year until final maturity, but in practice the index holding have a fluctuating average life of around 12.8 years.
The Bloomberg Barclays US Corporate High Yield Index measures the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below, excluding emerging market debt. Payment-in-kind and bonds with predetermined step-up coupon provisions are also included. Eligible securities must have at least one year until final maturity, but in practice the index holdings has a fluctuating average life of around 6.3 years.
The Barclays U.S. Government Bond Index is comprised of the U.S. Treasury and U.S. Agency Indices. The index includes U.S. dollar-denominated, fixed-rate, nominal US Treasuries and US agency debentures (securities issued by US government owned or government sponsored entities, and debt explicitly guaranteed by the US government).
The Bloomberg Commodity Index is a broadly diversified index that allows investors to track commodity futures through a single, simple measure. It is composed of futures contracts on physical commodities and is designed to minimize concentration in any one commodity or sector. It currently includes 19 commodity futures in five groups. No one commodity can comprise less than 2% or more than 15% of the index, and no group can represent more than 33% of the index (as of the annual reweightings of the components).
The Cboe Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices.
The MSCI EAFE is designed to measure the equity market performance of developed markets (Europe, Australasia, Far East) excluding the U.S. and Canada. The Index is market-capitalization weighted.
The MSCI Emerging Markets is designed to measure equity market performance in global emerging markets. It is a float-adjusted market capitalization index.
The MSCI All-Country World Index (ACWI) is a market cap weighted index designed to represent performance of the full opportunity set of large- and mid-cap stocks across 23 developed and 26 emerging markets, covering more than 2,700 companies across 11 sectors and approximately 85% of the free float-adjusted market capitalization in each market.
The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower forecasted growth values.
The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe and is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe and is a subset of the Russell 1000 Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap represents approximately 31% of the total market capitalization of the Russell 1000 companies.
The S&P BSE SENSEX Index is a free-float market-weighted index of 30 well-established and financially sound stocks on the Bombay Stock Exchange, representative of various industrial sectors of the Indian economy.
The S&P 500 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 Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.
The NASDAQ Composite Index includes all domestic and international based common type stocks listed on The NASDAQ Stock Market. The NASDAQ Composite Index is a broad-based capitalization-weighted index.
The Shanghai Composite Index is a stock market index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange.
The U.S. Dollar Index is a weighted geometric mean that provides a value measure of the United States dollar relative to a basket of major foreign currencies. The index, often carrying a USDX or DXY moniker, started in March 1973, beginning with a value of the U.S. Dollar Index at 100.000. It has since reached a February 1985 high of 164.720, and has been as low as 70.698 in March 2008.
West Texas Intermediate (WTI) is a crude oil stream produced in Texas and southern Oklahoma which serves as a reference or "marker" for pricing a number of other crude streams. WTI is the underlying commodity of the New York Mercantile Exchange's oil futures contracts.