By John Lau, CPA, CFP®
April 1, 2026 – The first quarter of 2026 started off with a bumpier ride than many investors expected. Markets were pulled in different directions by a mix of global events, concerns in parts of the financial system, and some growing questions around how artificial intelligence could impact certain industries. As a result, the S&P 500 ended the quarter modestly lower.
Early in January, markets were rattled by an unexpected geopolitical event when the U.S. carried out a military operation in Venezuela that resulted in the arrest of President Nicolás Maduro. That initially caused concern—especially given Venezuela’s importance in global oil supply—but tensions eased fairly quickly when new leadership signaled a willingness to work with the U.S.
Not long after, another headline created uncertainty—this time closer to home. Legal scrutiny involving Federal Reserve Chair Jerome Powell raised concerns about whether the independence of the Federal Reserve could be challenged. Since the Fed plays a critical role in controlling inflation, that understandably made investors uneasy. Fortunately, bipartisan support for Fed independence helped calm markets.
Despite these surprises, the underlying economy remained steady. Corporate earnings were generally solid, and the Fed continued to signal that interest rate cuts were still likely later this year. As a result, markets were able to recover and finish January on a positive note.
In February, volatility returned—but this time it was more focused on specific sectors. Technology stocks came under pressure after new AI developments raised concerns that some jobs and industries—particularly in software—could face disruption sooner than expected. At the same time, worries began to build in the private credit market, as some investment funds limited withdrawals, raising questions about whether parts of that market had become overheated.
Then, late in the month, geopolitical tensions escalated again when conflict broke out between the U.S. and Iran. This had a direct impact on global oil supply, pushing oil prices sharply higher. Taken together, these developments caused the market to pull back modestly in February, although it remained positive for the year at that point.
By March, markets faced continued pressure as hopes for a quick resolution to the U.S.-Iran conflict faded. Disruptions to energy infrastructure and shipping routes pushed oil prices above $100 per barrel, increasing concerns about the global economy. While there were signs of potential progress toward a ceasefire late in the month, the market still ended March—and the quarter—down overall.
In short:
The first quarter was marked by a series of unexpected events. However, it’s important to note that the core fundamentals—economic growth and corporate earnings—remained relatively stable, which helped prevent more significant market declines.
Looking Ahead: Q2 2026
As we move into the second quarter, markets are focused on three key areas:
1. Oil Prices & Geopolitics
Higher oil prices can ripple through the economy—impacting inflation, consumer spending, and corporate costs. For markets to stabilize, we’ll need to see easing tensions in the Middle East, a return to more normal oil supply levels, and some moderation in oil prices.
2. Private Credit Concerns
Some investors are drawing comparisons to past financial crises, but it’s important to keep things in perspective. The private credit market is much smaller and, so far, regulators have not identified systemic risks. Still, this remains an area we’re watching closely, particularly because financial stocks play a major role in overall market performance.
3. The Evolving Role of AI
AI continues to be a powerful long-term driver of growth, but in the short term, investors are reassessing both the costs and potential disruptions. Questions remain around whether heavy investment in AI will generate strong returns—and how it may reshape certain industries.
The Bottom Line
While the first quarter brought its share of surprises, not all the news is negative.
- The economy remains resilient
- Corporate earnings continue to grow
- The Federal Reserve is still signaling potential rate cuts
Markets are adjusting to new uncertainties, but they are also supported by solid fundamentals. And as we’ve seen many times before, conditions can change quickly.
At Robertson Stephens Wealth Management, we’ve navigated many market cycles like this. Periods of uncertainty can feel uncomfortable, but they are a normal part of investing.
Our focus remains on:
- Maintaining a well-diversified portfolio
- Managing risk thoughtfully
- Keeping your long-term plan front and center
Successful investing is a marathon—not a sprint. Staying disciplined, patient, and invested is critical to achieving your long-term goals.
We truly appreciate your continued trust and confidence. If you have any questions or would like to review your portfolio, please don’t hesitate to reach out.
Our clients rely on us for timely information, and our job is to deliver.
War, Credit Worries and AI Anxiety Weigh on Stocks
By John Lau, CPA, CFP®
April 1, 2026 – The first quarter of 2026 started off with a bumpier ride than many investors expected. Markets were pulled in different directions by a mix of global events, concerns in parts of the financial system, and some growing questions around how artificial intelligence could impact certain industries. As a result, the S&P 500 ended the quarter modestly lower.
Early in January, markets were rattled by an unexpected geopolitical event when the U.S. carried out a military operation in Venezuela that resulted in the arrest of President Nicolás Maduro. That initially caused concern—especially given Venezuela’s importance in global oil supply—but tensions eased fairly quickly when new leadership signaled a willingness to work with the U.S.
Not long after, another headline created uncertainty—this time closer to home. Legal scrutiny involving Federal Reserve Chair Jerome Powell raised concerns about whether the independence of the Federal Reserve could be challenged. Since the Fed plays a critical role in controlling inflation, that understandably made investors uneasy. Fortunately, bipartisan support for Fed independence helped calm markets.
Despite these surprises, the underlying economy remained steady. Corporate earnings were generally solid, and the Fed continued to signal that interest rate cuts were still likely later this year. As a result, markets were able to recover and finish January on a positive note.
In February, volatility returned—but this time it was more focused on specific sectors. Technology stocks came under pressure after new AI developments raised concerns that some jobs and industries—particularly in software—could face disruption sooner than expected. At the same time, worries began to build in the private credit market, as some investment funds limited withdrawals, raising questions about whether parts of that market had become overheated.
Then, late in the month, geopolitical tensions escalated again when conflict broke out between the U.S. and Iran. This had a direct impact on global oil supply, pushing oil prices sharply higher. Taken together, these developments caused the market to pull back modestly in February, although it remained positive for the year at that point.
By March, markets faced continued pressure as hopes for a quick resolution to the U.S.-Iran conflict faded. Disruptions to energy infrastructure and shipping routes pushed oil prices above $100 per barrel, increasing concerns about the global economy. While there were signs of potential progress toward a ceasefire late in the month, the market still ended March—and the quarter—down overall.
In short:
The first quarter was marked by a series of unexpected events. However, it’s important to note that the core fundamentals—economic growth and corporate earnings—remained relatively stable, which helped prevent more significant market declines.
Looking Ahead: Q2 2026
As we move into the second quarter, markets are focused on three key areas:
1. Oil Prices & Geopolitics
Higher oil prices can ripple through the economy—impacting inflation, consumer spending, and corporate costs. For markets to stabilize, we’ll need to see easing tensions in the Middle East, a return to more normal oil supply levels, and some moderation in oil prices.
2. Private Credit Concerns
Some investors are drawing comparisons to past financial crises, but it’s important to keep things in perspective. The private credit market is much smaller and, so far, regulators have not identified systemic risks. Still, this remains an area we’re watching closely, particularly because financial stocks play a major role in overall market performance.
3. The Evolving Role of AI
AI continues to be a powerful long-term driver of growth, but in the short term, investors are reassessing both the costs and potential disruptions. Questions remain around whether heavy investment in AI will generate strong returns—and how it may reshape certain industries.
The Bottom Line
While the first quarter brought its share of surprises, not all the news is negative.
Markets are adjusting to new uncertainties, but they are also supported by solid fundamentals. And as we’ve seen many times before, conditions can change quickly.
At Robertson Stephens Wealth Management, we’ve navigated many market cycles like this. Periods of uncertainty can feel uncomfortable, but they are a normal part of investing.
Our focus remains on:
Successful investing is a marathon—not a sprint. Staying disciplined, patient, and invested is critical to achieving your long-term goals.
We truly appreciate your continued trust and confidence. If you have any questions or would like to review your portfolio, please don’t hesitate to reach out.
Our clients rely on us for timely information, and our job is to deliver.
Disclosure and Source
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