Approach Correction

• US stock markets experienced sharp volatility in March 2026, with equities approaching correction territory before a month-end rally as oil prices surged significantly, driven by geopolitical events shaping the economic outlook. • Energy emerged as the strongest-performing sector, driving value stocks to materially outperform growth peers, while bond markets showed less stability than expected as inflation concerns contributed to higher rate volatility. • Despite market weakness and narrowing leadership, corporate profit expectations remained resilient with consensus earnings forecasts pointing to healthy growth in 2026, suggesting the selloff was driven by valuation reassessment rather than earnings deterioration.

• The tech-heavy Nasdaq and Dow Jones are on the brink of correction territory, defined as a 10% decline from recent peaks, with investors growing concerned the Iran conflict may cause lasting market damage beyond typical episodes. • All three major stock indexes closed Friday with their fourth consecutive weekly loss: the Dow fell 2.1%, Nasdaq dropped 2.1%, and the S&P 500 tumbled 1.9%, according to FactSet data. • The "TACO trade" (Trump Always Chickens Out), where investors bet Trump will reverse course during market selloffs, is looking increasingly suspect as the conflict deepens, with analysts warning that longer-term resolution becomes harder the deeper the conflict progresses.