U.S. Markets
Stocks fell in the first quarter amid concerns that artificial intelligence (AI) could disrupt certain industries along with geopolitical issues that unsettled investors.
The Dow Jones Industrial Average lost 3.58%, while the Standard & Poor’s 500 Index fell 4.63% and the Nasdaq Composite declined 7.11%.1,2
A Choppy January
Stocks trended higher in January as upbeat economic data offset geopolitical tensions. Investors responded positively to December’s inflation report, which was followed by a solid retail sales report. However, evolving geopolitical situations and mixed results from money center banks placed some pressure on stock prices.3,4
The S&P 500 traded above the 7,000 level for the first time during the month.5
February’s Focus on AI
Stock prices struggled in February amid investor concerns that AI could disrupt a wide swath of industries. Traders worried that AI might fundamentally reshape certain business models, prompting a reassessment of valuations in affected sectors.⁶
As the month came to a close, attention shifted once again to geopolitical events. While the Dow posted a modest gain, tech-led declines weighed the S&P 500 and Nasdaq.7
A Volatile March Finishes Strong
Volatility increased in March as investors reacted to daily developments in the Middle East. Despite the uncertainty, stocks ended the month on a strong note. A powerful rally on the final day helped recover some quarterly losses, as fresh news raised hopes for a potential resolution to the conflict8
The Federal Reserve
The Federal Open Market Committee (FOMC) voted 11-1 to keep interest rates steady at its March 18 meeting, maintaining the federal funds rate in a target range of 3.50% to 3.75%.
This marks the second consecutive meeting in which the FOMC held rates steady.10
In late March, Fed Chair Powell said inflation expectations “appear to be well anchored beyond the short term,” despite concerns about the potential inflationary impact of Middle East tensions.11
The Federal Reserve’s next meeting is scheduled for April 28–29.
What Investors May Be Talking About in April
Looking ahead, investors could experience continued volatility as markets respond to ongoing geopolitical developments and new economic data.
For perspective, between 1980 and 2025—approximately 2,400 weeks—there were only 40 weeks in which the S&P 500 declined 5% or more.9
During the remaining weeks, the S&P either held steady, gained ground, or declined less than 5%. Past performance is no guarantee of future results.9
Keep in mind that no one can consistently predict market downturns, and it’s nearly impossible to distinguish between a short-term dip and a prolonged correction while it is happening.
Pullbacks are a natural and unavoidable part of investing—even though they are often uncomfortable for investors.
If recent market volatility has you thinking about your financial strategy, now is a great time to revisit your plan. Contact your Patriot advisor today to review your financial plan and ensure it remains aligned with your long-term goals.
- WSJ.com, March 31, 2026
- TMX.com, March 31, 2026
- CNBC.com, January 13, 2026
- CNBC.com, January 14, 2026
- CNBC.com, January 28, 2026
- CNBC.com, February 12, 2026
- WSJ.com, February 27, 2026
- WSJ.com, March 31, 2026
- InstituteOfBusinessFinance.com, February 2026. For this study, a week was measured as a single calendar week.
- WSJ.com, March 18, 2026
- CNBC.com, March 30, 2026
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.