contentfulfillment.com

Blog

  • Weekly Market Performance | April 2, 2026

    LPL Research
    Last Updated: April 02, 2026

    LPL Financial and the stock market will be closed on Friday, April 3 for the Good Friday holiday.

    LPL Research provides its Weekly Market Performance for the week of March 30, 2026. U.S. equities rallied during the holiday-shortened week, snapping a multi-week losing streak as easing Treasury yields, quarter end rebalancing, and hopes for a de-escalation in the U.S.–Iran conflict supported risk assets, with the Nasdaq outperforming on strength in large cap technology. Internationally, European stocks advanced on improved risk sentiment and cooler inflation data, while Asian markets were mostly weaker. Core bonds posted gains as Treasury yields pulled back on more dovish rate expectations pricing. Crude prices continued to trend higher as the conflict in Iran continued, while the U.S. dollar traded modestly lower amid volatile headlines.

    Stock Index Performance

    Index Week-Ending One Month Year to Date
    S&P 500 3.18% -4.51% -4.01%
    Dow Jones Industrial 2.85% -5.01% -3.35%
    Nasdaq Composite 4.14% -4.10% -6.13%
    Russell 2000 3.07% -4.93% 1.73%
    MSCI EAFE 4.47% -5.14% 2.05%
    MSCI EM 2.48% -8.02% 3.40%

    S&P 500 Index Sectors

    Sector Week-Ending One Month Year to Date
    Materials 3.26% -5.73% 10.42%
    Utilities 1.23% -2.02% 8.22%
    Industrials 2.84% -8.31% 5.60%
    Consumer Staples 0.43% -6.61% 6.84%
    Real Estate 3.63% -5.21% 3.70%
    Health Care 2.20% -7.42% -5.39%
    Financials 3.47% -3.21% -9.61%
    Consumer Discretionary 2.51% -5.47% -10.07%
    Information Technology 4.30% -3.23% -7.83%
    Communication Services 6.14% -5.52% -5.92%
    Energy -5.35% 4.47% 32.50%

    Fixed Income and Commodities

    Indexes and Commodities Week-Ending One Month Year to Date
    Bloomberg U.S. Aggregate 0.77% -1.32% -0.03%
    Bloomberg Credit 1.03% -1.44% -0.41%
    Bloomberg Munis 0.63% -1.88% 0.05%
    Bloomberg High Yield 1.19% -0.71% -0.12%
    Oil 11.41% 55.85% 93.33%
    Natural Gas -9.56% -5.44% -24.06%
    Gold 3.94% -12.23% 8.14%
    Silver 4.16% -18.70% 1.40%

    Source: LPL Research, Bloomberg 4/2/26 @3:16 p.m. ET
    Disclosures: Indexes are unmanaged and cannot be invested in directly.

    U.S. and International Equities

    U.S. Equities: Despite capping a down month and the first quarterly loss over the last four, the S&P 500 snapped a five-week losing streak, posting a healthy four-day advance over the holiday shortened week.  After rate-sensitive trading on Monday sent equities lower alongside Treasury yields, following calming remarks from Federal Reserve (Fed) Chair Powell, major averages delivered a stout two-day relief rally on optimism around U.S.-Iran offramps. Fueling the surge was reports that President Trump told aides he is willing to end hostilities in Iran should the Strait of Hormuz be re-opened, with separate reports later indicating that Iranian President Pezeshkian stated he is ready to end the war accelerating gains. Improved market positioning, month- and quarter-end rebalancing dynamics, and mostly higher big tech names also broadly padded gains helping lift the Nasdaq a bit more than the S&P 500. The abbreviated week ended on a mixed note, as stocks pared early Thursday losses on a report that Iran is drafting a protocol with Oman to monitor traffic through the Strait of Hormuz after President Trump threatened potentially intensifying attacks over the last few weeks of the conflict. While remaining lower on the day, the development was seen as a step in the right direction by investors given the reversal of a 1.5% loss in the S&P 500.

    International Equities: European equities also advanced through Thursday trading. Utilities and basic resources industry groups led the charge with the latter receiving support from metals and mining names on the prospect for record aluminum prices following Iranian strikes on aluminum plants in Bahrain and the UAE, threatening a supply strain. Risk appetite was lifted on hopes of a ceasefire in the Mideast, with sentiment further buoyed by hopes that price pressures may be less than initially feared following a slightly cooler than expected preliminary consumer inflation report for March. After recent outperformance, energy shares were relative underperformers with the lion’s share of gains arriving on Thursday as crude prices turned higher.

    On the other side of the coin, major Asian markets traded mostly lower heading into the first Friday of the month. South Korea remained a standout as the KOSPI remained highly sensitive to the vast swings in geopolitical headlines, with some downward pressure to start the week also stemming from pension authorities warning over the need to stabilize the won. Chipmakers were also a weak spot, with a similar dynamic weighing on Taiwan, while Japanese benchmarks also dropped on raised fiscal jitters from recent yen weakness, firmer crude prices, and central bank minutes discussing more rate hikes. Greater China continued to display some relative insulation to geopolitical worries as Hong Kong moved higher while mainland losses were subdued as Hong Kong moved higher while mainland losses were subdued.

    Fixed Income, Currency, and Commodity Markets

    Fixed Income: Core bonds, measured by the Bloomberg Aggregate Index, traded higher on the week heading into Friday’s abbreviated session. The Treasury market enjoyed some upside this week as bonds rallied alongside equity markets on hopes that an end to U.S.-Iran hostilities is around the corner. Yields pulled back as traders began to re-price a chance of a Fed rate cut in 2026 — or more likely a hold which is still more dovish than a rate hike — and continued to fall on Thursday despite speculation that elevated oil prices could stick around after Wednesday’s Presidential address.

    More broadly in fixed income markets, the ongoing conflict in Iran has pushed global bond yields higher in March, weighing on the national municipal market as well. While March is typically a challenging month for munis — the average return over the past 10 years is ‑0.32% — last month’s ‑2.5% decline was the worst March performance since March 2022, which coincided with the most aggressive Fed tightening cycle in decades. It was also the worst monthly return since September 2023, with negative returns broad‑based across credit quality. With the drawdown, however, valuations have improved meaningfully and relative value versus Treasuries and taxable corporates has also improved, making munis competitive for investors with marginal tax rates as low as roughly 29%.

    One caveat: April has historically been a difficult seasonal month for munis, with six of the past 10 Aprils producing negative returns and an average return of ‑0.40% over the past decade. Elevated supply, weak reinvestment flows, and tax‑related redemptions tend to pressure the market during this period. Nonetheless, value has returned to the municipal market, particularly in the intermediate portion of the curve.

    Commodities and Currencies: The broader commodities complex was poised for a weekly advance Thursday afternoon as crude oil prices continued to march higher as April begins. Despite relatively rangebound trading, and even dipping lower on Wednesday, West Texas Intermediate (WTI) crude prices soared back into positive territory Thursday after President Trump’s primetime address from Pennsylvania Avenue disappointed investors by not providing a clear resolution timeline on the conflict in Iran or when the Strait of Hormuz will reopen, remarking that attacks may escalate as the U.S. campaign nears its end.  WTI remained near weekly highs despite the reports that Iran is working with Oman on a protocol to monitor traffic through the waterway. Elsewhere, gold prices continued to bounce off key technical levels reached last week, adding over 3% through Thursday afternoon trading, while silver also gained ground.  In currencies, the U.S. Dollar Index faced choppy trading amid volatile geopolitical headlines, rate expectations, and economic outlooks, ultimately trading slightly lower but still hovering near 100.

    Economic Weekly Roundup

    Tuesday’s release of the JOLTS jobs report indicated hiring and job openings fell but, not across all sectors. Data from the Bureau of Labor Statistics suggested the quits rate and hiring rate fell in February as the labor market cooled from the headwinds of inflation and tariff uncertainty. We won’t see the potential impact of Operation Epic Fury until next month. Across most industries, the February quits rate is below pre-pandemic levels, indicating workers’ uncertainty within the job market. On the other side of the equation, we see hiring rates have also weakened, particularly in healthcare services. This is important given the driving force in payrolls recently. Expect weakness in Friday’s nonfarm payroll report within cyclicals like retail trade and construction. But it’s not all bad news. In contrast, hiring rates (a signal from firms) and quit rates (a signal from workers) rose in the information technology space. Product demand is supportive of a decent job market for this industry.

    For many workers, the uncertainty within the job market has suppressed the desire to move from one job to another. On the labor demand side, firms have pulled back on hiring rates. The one anomaly is within the information technology sector as solid labor demand has bucked the trend.

    The Week Ahead

    The following economic data is slated for the week ahead:

    • Monday: ISM Services Index (Mar)
    • Tuesday: ADP Weekly Employment Change (Mar 21), Durable Goods Orders (Feb preliminary), Capital Goods Orders and Shipments (Feb preliminary), New York Fed One-Year Inflation Expectations (Mar), Consumer Credit (Feb)
    • Wednesday: MBA Mortgage Applications (Apr 3), FOMC Meeting Minutes (Mar 18)
    • Thursday: Personal Income and Spending (Feb), Headline and Core PCE Price Index (Feb), Initial Jobless Claims (Apr 4), Continuing Claims (Mar 28), GDP (4Q third reading), Personal Consumption (4Q third reading), Core PCE Price Index (4Q third reading), Wholesale Inventories (Feb final), Wholesale Trade Sales (Feb)
    • Friday: Headline and Core CPI (Mar), Real Average Hourly Earnings (Mar), Real Average Weekly Earnings (Mar), Factory Orders (Feb), University of Michigan Consumer Sentiment Report (Apr preliminary), Durable Goods Orders (Feb final), Capital Goods Orders and Shipments (Feb final)

    Important Disclosures

    This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

    Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

    Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

    This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

    Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

    Asset Class Disclosures –

    International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

    Bonds are subject to market and interest rate risk if sold prior to maturity.

    Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

    Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

    Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

    Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

    High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

    Precious metal investing involves greater fluctuation and potential for losses.

    The fast price swings of commodities will result in significant volatility in an investor’s holdings.

    This research material has been prepared by LPL Financial LLC.

    Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

    For Public Use – Tracking: #1087893

  • A Review of Active Management

    Where Has Active Management Shined and Struggled?

    Derek Beiter | Senior Investment Analyst
    Last Updated: April 01, 2026

    LPL Research periodically conducts a detailed study that examines when and where active management has performed well. Our data includes actively-managed mutual funds across a variety of asset categories, going back 20 years. We assess active management using a variety of criteria. Here we present what we believe are two essential and complementary criteria: excess returns and batting averages. For excess returns, we take the return of each fund and subtract the returns for the benchmark we designate for that asset class. Pardon the baseball reference, but batting average simply means the percentage of funds that outperformed the benchmark designated for the asset class.

    While we are eager to present our results, let us first point out some careful details we undertake.

    • To have fair comparisons, funds were measured against appropriate benchmarks. For example, small value funds were measured against the Russell 2000 Value Index.
    • We break the 20-year period into smaller three-year chunks, overlapping “rolling-periods,” to help us measure consistency and how performance has changed over time.
    • Where possible, we included the returns of funds that no longer exist. This helps adjust for survivorship bias, the idea that worse-performing funds may get liquidated or merged into other funds, artificially inflating the return of the “average fund.”
    • Since we are interested in studying the effectiveness of active management, we excluded index funds.
    • We focused on institutional share classes, the type of shares commonly used in advisory programs.

    Without further ado, below, we rank each asset class from best to worst based on the funds’ excess returns compared to the designated benchmark. The three asset classes where active management was generally more successful included Long-term Bonds, Global Bonds, and Short-term Bonds. Meanwhile, Large Blend, Mid Blend, and Large Growth were asset classes where active management generally underperformed. The number of individual funds in each category range from 50 to 300.

    Active Funds’ Excess Returns Versus Benchmarks

    Fund Average Annualized Excess Return
    Long-Term Bond 0.60
    Global Bond 0.51
    Short-Term Bond 0.46
    Foreign Large Value 0.33
    Intermediate Core-Plus Bond 0.29
    Foreign Large Growth 0.27
    Global Bond-USD Hedged 0.26
    Small Value 0.16
    Large Value 0.10
    Intermediate Core Bond 0.08
    Foreign Large Blend 0.06
    Long Municipals -0.01
    Small Growth -0.19
    Short-Term Municipals -0.19
    Intermediate Municipals -0.36
    Diversified Emerging Markets -0.38
    Small Blend -0.40
    Emerging Markets Bond -0.40
    Mid-Cap Value -0.43
    Real Estate -0.49
    Mid-Cap Growth -0.78
    High Yield Municipals -0.93
    High Yield Bond -1.02
    Large Blend -1.03
    Mid-Cap Blend -1.31
    Large Growth -1.58

    Source: LPL Research, FacSet 12/31/25

    Next, we rank each asset class from best to worst based on batting averages – the percentage of funds in that asset class that outperformed – it is actually an average of 3-year rolling periods over the last 20 years. A relatively higher percentage of active managers outperformed benchmarks within Short-term Bonds, Long-term Bonds, and Intermediate Core-Plus Bonds. Meanwhile, High Yield Municipals, Large Growth, and High Yield Bonds were places where fewer active managers outperformed.

    Percent of Active Funds that Outperformed Benchmarks (Average of 3-Year Periods)

    Fund Average Annualized Excess Return
    Short-Term Bond 72%
    Long-Term Bond 71%
    Intermediate Core-Plus Bond 62%
    Intermediate Core Bond 61%
    Global Bond-USD Hedged 60%
    Foreign Large Value 59%
    Long Municipals 58%
    Small Value 57%
    Global Bond 56%
    Large Value 54%
    Small Blend 53%
    Foreign Large Blend 51%
    Foreign Large Growth 51%
    Small Growth 51%
    Diversified Emerging Markets 48%
    Municipal National Intermediate 44%
    Mid-Cap Value 44%
    Real Estate 42%
    Short-Term Municipals 42%
    Emerging Markets Bond 42%
    Mid-Cap Growth 39%
    Large Blend 35%
    Mid-Cap Blend 34%
    High Yield Municipal 29%
    Large Growth 27%
    High Yield Bond 26%

    Source: LPL Research, FactSet 12/31/25

    The results based on the two methods generally line up fairly closely. In cases where more than 50% of actively managed funds outperformed, the excess return of the average fund was generally positive as well. There were only three cases where batting averages were above 50% but excess returns were negative, including Small Blend, Small Growth, and Long Municipals.

    Recent Trends in Batting Averages

    • 3-year batting averages for small- and mid-cap active managers declined for year-end 2025 as compared to year-end 2024. This coincided with a sharply advancing equity market in 2025, and one in which higher-risk stocks generally outperformed. Our research suggests that active managers tend to outperform their benchmarks more readily in down markets, while they often struggle in sharply advancing markets. Many small cap active managers position their portfolios with higher quality and lower risk than the benchmarks, which can prevent them from keeping pace during sharply advancing markets.
    • Many fixed-income asset classes had improvements in their 3-year active manager batting averages in 2025 as compared to 2024, including Long Municipals, Intermediate Municipals, Intermediate Core-Plus Bonds, and Short-Term Bonds.

    Broader Observations

    • Taxable fixed income asset classes have historically been some of the best for active management relative performance. This may reflect the many varied decisions active managers are able to make, such as which sectors and maturities to emphasize, in addition to security selection.
    • Active management has generally been more favorable in small caps as compared to large-and mid-caps. Within small caps, there are a greater number of companies available for active managers to scour for opportunities. Additionally, smaller companies may be less well covered and understood by market participants, creating more opportunities for active managers putting in the leg work.
    • Within large-cap, small-cap, and foreign equities, active managers of value-style equities have generally outperformed their value benchmarks more readily than growth managers have outperformed their growth benchmarks. Domestically, this may be a reflection of the strong long-term index performance in the growth benchmarks that has been difficult for active managers to outpace.

    How Does This Apply to Portfolios We Manage?

    LPL Research manages a variety of Active-Passive portfolios that include both actively-managed and passively-managed investments. Our Active-Passive framework allows us to generally tilt toward active management in the asset classes where our research suggests it may have greater potential for outperformance. Excess returns and batting averages are two of the many quantitative factors we evaluate. We also consider softer, hard-to-quantify criteria that may impact the results of active managers. For example, we believe the below asset classes may be more favorable for active managers than historical data suggests.

    • Diversified Emerging Markets. Active managers can make judgments about geopolitical risks in emerging markets, whereas passive funds must stick with benchmark weightings despite any negative impacts. Emerging market indices can also become concentrated in certain countries or sectors, making the performance of passive funds heavily dependent upon these exposures.
    • High Yield Bonds. The high yield indices often tilt towards the largest issuers and most liquid securities, and passive funds must invest accordingly, regardless of increased risks or forgone opportunities. Additionally, passively-managed high yield funds, in certain time periods, have struggled to match the returns of the benchmark index.
    • Long-term Municipals and High Yield Municipals. Passively-managed funds in these categories, in certain time periods, have struggled to match the returns of the benchmark index. We also believe that inefficiencies in the municipal market may be more plentiful in longer-maturity and lower-quality bonds, allowing active managers to potentially add yield to their portfolios while proactively monitoring risk.

     

     

     

    Benchmark Disclosures:

    Asset Class LPL Research Assigned Benchmark
    Diversified Emerging Mkts MSCI EMF (Emerging Markets) – Net Return
    Emerging Markets Bond Bloomberg EM USD Aggregate TR USD
    Foreign Large Blend MSCI EAFE – Net Return
    Foreign Large Growth MSCI Growth EAFE – Net Return
    Foreign Large Value MSCI EAFE Value- Net Return
    Global Bond Bloomberg Global Aggregate TR
    Global Bond-USD Hedged Bloomberg Global Aggregate TR Hedged
    High Yield Bond Bloomberg Barclays US Aggregate Credit – Corporate – High Yield
    High Yield Muni Bloomberg HY Muni Index
    Intermediate Core Bond Bloomberg Barclays US Aggregate
    Intermediate Core-Plus Bond Bloomberg Barclays US Universal TR
    Intermediate Municipals Bloomberg Barclays Municipal Bond 7 Year
    Large Blend Russell 1000 – Total Return
    Large Growth Russell 1000 Growth – Total Return
    Large Value Russell 1000 Value – Total Return
    Long Municipals Bloomberg Barclays Municipal Bond
    Long-Term Bond Bloomberg Barclays Govt Credit Long
    Mid-Cap Blend Russell Midcap – Total Return
    Mid-Cap Growth Russell Midcap Growth – Total Return
    Mid-Cap Value Russell Midcap Value – Total Return
    Real Estate Nareit Equity Index – Total return
    Short-Term Bond Bloomberg Barclays US Aggregate Government & Credit (1-3 Y)
    Short-term Municipals Bloomberg Muni Bond 3 Year TR
    Small Blend Russell 2000 – Total Return
    Small Growth Russell 2000 Growth – Total Return
    Small Value Russell 2000 Value – Total Return

     

    Disclosure: LPL Research assigns each asset class a benchmark, above are asset classes and their corresponding LPL Research assigned benchmark. 

    Important Disclosures

    This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

    Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

    Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

    This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

    Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

    Asset Class Disclosures –

    International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

    Bonds are subject to market and interest rate risk if sold prior to maturity.

    Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

    Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

    Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

    Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

    High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

    Precious metal investing involves greater fluctuation and potential for losses.

    The fast price swings of commodities will result in significant volatility in an investor’s holdings.

    This research material has been prepared by LPL Financial LLC.

    Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

    For Public Use – Tracking: #1087045

  • Technical Perspective on the Current Drawdown

    Adam Turnquist | Chief Technical Strategist
    Last Updated: March 31, 2026

    As the first quarter comes to a close, it’s clear that equity markets have endured a difficult stretch. The strong momentum that drove a record‑setting rally early in the year faded quickly as concerns over artificial intelligence (AI) spending and disruption dampened risk appetite. The outbreak of the Iran war in late February added new challenges, as the essential closure of the Strait of Hormuz underpinned an unprecedented supply shock in oil that quickly drove prices to multi-year highs. Inflation fears promptly followed, and the market drastically repriced global monetary policy expectations to a higher-for-longer regime, with growing probabilities for tightening among major central banks (including the Federal Reserve).

    With markets now hinging on when the U.S.‑Iran conflict might be resolved and when the Strait will fully reopen, uncertainty remains the dominant force. The longer the conflict persists, the greater the potential strain on global growth, inflation, interest rates, earnings, profit margins, and ultimately equity markets.

    Stocks have struggled against this challenging backdrop. The S&P 500 posted its fifth straight weekly decline last week and is now inching toward correction territory, technically defined by a drawdown of 10–20%. Technical damage has been significant as the index broke below its closely watched 200-day moving average (dma) and the November lows at 6,522. This leaves 6,174 (a key Fibonacci retracement level of the April–January advance) and the February highs at 6,144 as the next major downside support levels to watch.

    The consistent pattern of lower highs and lower lows over the past two months has turned near-term momentum gauges bearish. Although oversold conditions are starting to emerge, most indicators have yet to reach the extreme levels that typically signal contrarian buying opportunities. For instance, only about 11% of S&P 500 stocks registered oversold Relative Strength Index (RSI) readings on Friday, well below the +50% seen last April or the +20% levels observed during previous market corrections in recent years.

    Selling pressure has also been widespread, and market internals continue to deteriorate. Only 43% of S&P 500 constituents remain above support from their November lows, with a similar share still holding above their 200-dma. Breadth composition is also concerning, as defensive sectors have taken leadership. Technology, the market’s largest weight, has rolled over, while financials and consumer discretionary sit among the weakest areas in our technical work. A durable recovery will require renewed risk appetite across these sectors, along with meaningful technical improvements.

    Technical Deterioration Points to Near-Term Downside Risk

    This line chart provides the performance of S&P 500 and the percentage of members with an RSI over 30.

    Source: LPL Research, Bloomberg 03/30/26
    Disclosures: Indexes are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

    Historical Perspective

    Taking a step back to a longer‑term (and more encouraging) perspective, the secular uptrend supporting this bull market remains firmly in place. History also offers reassurance when it comes to geopolitical shocks. As we noted in our March 9 Weekly Market Commentary (Markets Tested as Iran Conflict Continues), “The stock market has demonstrated remarkable resilience in the face of major geopolitical shocks in the past.” Our analysis of more than 80 years of market reactions to 26 distinct geopolitical events shows that the S&P 500 has historically gained an average of 7.8% in the 12 months following such events and finished higher 68% of the time, although past performance does not guarantee future results.

    Although drawdowns can feel uncomfortable, particularly following the low‑volatility environment that characterized the start of the year, they should not catch investors off guard. Over the past 75 years, the S&P 500’s average peak‑to‑trough intra‑year pullback has been ‑13.7%. More importantly, despite these declines, the index has delivered an average annual price gain of 9.6%, with positive returns in 74% of those years. As illustrated in the “Bull Markets Are Not Linear” chart, even sizable drawdowns have not necessarily translated to down years. Last year serves as a clear example: equity markets fell nearly 20% in April amid tariff‑related concerns, but as those fears eased and trade policy softened, investor focus shifted back to fundamentals like earnings and economic growth, which helped drive a strong recovery.

    Bull Markets Are Not Linear

    This bar graph highlights the S&P 500 annual price returns and maximum drawdowns.

    Source: LPL Research, Bloomberg 03/30/26
    Disclosures: Past performance is no guarantee of future results. All indexes are unmanaged and can’t be invested in directly. The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates the performance of the predecessor index, the S&P.

    Frequency of Drawdowns

    A bull market can sometimes cause investors to forget that drawdowns are not anomalies, they are a normal and frequent part of market behavior. Outside of periods when stocks are setting new record highs, the market is almost always experiencing some degree of pullback. Historically, on a calendar‑year basis, the S&P 500 has spent nearly 70% of trading days in a drawdown of up to 5% and roughly 18% of trading days in a 5–10% drawdown range. Investors may find it reassuring that deeper declines are far less common, as illustrated in the “Drawdowns Should Be Expected” chart.

    Drawdowns Should Be Expected

    This bar graph displays the annual S&P 500 drawdown frequency distribution.

    Source: LPL Research, Bloomberg 03/30/26
    Disclosures: Past performance is no guarantee of future results. All indexes are unmanaged and can’t be invested in directly.The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates the performance of the predecessor index, the S&P.

    Conclusion

    Equity markets continue to grapple with mounting near‑term pressures and technical conditions have undeniably weakened. The recent supply‑driven spike in oil prices, rising inflation concerns, and geopolitical uncertainty have all contributed to growing downside risk over the weeks ahead. These forces may keep volatility elevated and leave markets vulnerable to additional corrective price action in the short run.

    However, it’s equally important to recognize that the longer‑term backdrop has not fundamentally changed. The secular uptrend supporting this bull market is still intact, and history demonstrates that periodic drawdowns are a routine feature of equity markets rather than a clear signal of imminent long-term destruction. As highlighted earlier, the S&P 500 has spent the vast majority of its trading history in some degree of drawdown, with sizable peak‑to‑trough declines occurring even in years that ultimately delivered strong positive returns. This perspective reinforces the idea that short‑term weakness can coexist with resilient long‑term trends. Please note that past performance does not guarantee future results.

    In our view, as long as fundamentals remain reasonably solid and the technical foundation of the longer‑term trend holds, periods of market stress should be viewed through a measured lens. Near‑term downside risks have increased, but the longer‑term technical and fundamental backdrop provide an encouraging counterbalance, in our view.

    Important Disclosures

    This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

    Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

    Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

    This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

    Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

    Asset Class Disclosures –

    International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

    Bonds are subject to market and interest rate risk if sold prior to maturity.

    Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

    Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

    Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

    Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

    High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

    Precious metal investing involves greater fluctuation and potential for losses.

    The fast price swings of commodities will result in significant volatility in an investor’s holdings.

    This research material has been prepared by LPL Financial LLC.

    Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

    For Public Use – Tracking: #1086293

  • Weekly Market Commentary | Earnings Season Outlook: Will Markets Care? | March 30, 2026

    Earnings Likely to Grow Double-Digits Again; Will Markets Care?

    PRINTER FRIENDLY VERSION

    Earnings drive stock prices over time, but not all the time. Clearly, we’re in an environment where stocks are moving on developments in the Mideast and related moves in oil prices and interest rates. At the risk of writing about something that markets may not care much about right now, here we share some thoughts on the upcoming earnings season and the earnings outlook for the rest of the year.

    Despite the sharp rise in oil prices and interest rates in March, our expectation is that the upcoming earnings season will be solid. While companies with business models sensitive to oil and rates may strike a more cautious tone in their outlooks, we expect to again be impressed by the resilience of corporate America, bolstered by our energy independence.

    Our confidence in the earnings outlook for 2026 has not wavered, and future earnings are available to investors at a discounted price following the stock market pullback. While today may not mark the stock market low, and our technical analysis work points to heightened risk of some additional near-term downside, our belief that 2026 will be a good year for stocks on the back of solid economic growth and strong earnings has not changed. Once a path to ending the conflict becomes clear and oil and interest rates come back down, stocks should get a nice jolt to the upside as earnings recapture investor attention.

    Expect Earnings to Power Through the Fog

    The consensus estimate for first quarter (Q1) earnings growth is 12.3%. As we know, barring a swift and sharp economic shock intra-quarter, companies do a tremendous job of beating estimates. In fact, S&P 500 earnings have historically beaten consensus estimates more than 90% of the time. We expect Q1 to be no different.

    With a boost from higher energy sector profits and a year-over-year decline in the U.S. dollar, balanced against some additional costs and supply chain disruptions across certain industries, we expect earnings growth in the mid-teens for the quarter. That would mark the sixth straight quarter of double-digit earnings growth.

    Massive artificial intelligence (A) investment and fiscal stimulus from the One Big Beautiful Bill Act (OBBBA) provide a solid foundation for revenue growth. Strong exports out of South Korea and the latest bump up in manufacturing surveys add to our confidence that Q1 earnings will be solid.

    That said, guidance may not be “clean” given not just higher oil prices but disruptions to commodity supply chains and transportation, and higher interest rates. This is why we’re not counting on estimates for the rest of the year to rise through reporting season (starting the week of April 13), with the exception of the energy sector and potentially technology depending on what happens with capital investment plans for the so-called hyperscalers building out AI data centers.

    Double-Digit Earnings Growth Streak Poised to Continue

    Bar chart of actual S&P 500 earnings growth from Q1 2023 to Q4 2025, along with estimates for Q1 2006 to Q4 2026, highlighting double-digit earnings growth should continue in Q1 2026 and beyond.

    Source: LPL Research, FactSet 03/26/26
    Disclosures: Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested in directly. Estimates may not develop as predicted and are subject to change.

    AI Investment Isn’t Going Anywhere

    Speaking of the hyperscalers, which will again be a huge earnings driver this quarter, expectations for capital investment in 2026 have risen to over $650 billion. In December 2025, when LPL Research published Outlook 2026: The Policy Engine, that forecast stood at $520 billion.

    Based on current estimates, about 80% of the earnings growth for the S&P 500 in Q1 is expected to be driven by the technology sector, while the Magnificent (Mag) Seven alone is estimated to generate nearly half of S&P 500 earnings growth and grow earnings by about 19% based on current consensus estimates on an earnings-weighted basis.

    That pace of growth from this group, which could likely exceed 25% when all the results are in, will probably more than double the earnings growth rate that the “S&P 493” will deliver. However, that gap is expected to narrow in coming quarters, something to watch closely given the recent struggles of these mega-cap technology stocks. The Mag Seven’s valuation, at a price-to-earnings ratio near 26, has come down but remains roughly 25% higher than the valuation for the rest of the S&P 500, aka the “493.”

    This earnings growth gap supports LPL Research’s continued preference for large growth equities over their large value counterparts for now, but the leash has gotten shorter. The Mag Seven has slipped 13% year to date based on the Bloomberg Magnificent Seven Index, well behind the 5% drop in the S&P 500 over that time period.

    Magnificent Seven Remains a Powerful Earnings Driver

    Bar chart of Magificent Seven earnings growth compared to earnings growth excluding the Magificent Seven from Q1 2024 to Q4 2025, along with estimates for Q1 2006 to Q4 2026, highlighting the Magificent Seven remains a powerful earnings driver.

    Source: LPL Research, Bloomberg 03/26/26
    Disclosures: Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested in directly. Estimates may not develop as predicted and are subject to change.

    Corporate America Has Managed Margin Pressures Remarkably Well

    Corporate America has managed costs very well recently, enabling S&P 500 companies to expand operating margins for five straight quarters despite the incremental cost of tariffs. Recall, after the Supreme Court ruled tariffs enacted under the International Emergency Economic Powers Act were illegal, the Trump administration put them back on using a different legal authority. In addition, refunds will take quite some time, so they will not affect first quarter results. Bottom line, don’t look for margins to get a tariff boost, although the refund pool that is estimated at over $160 billion may drop into some importers’ coffers at some point down the road.

    Just when companies figured out how to absorb tariffs and still expand margins, they are getting hit with more challenges in the form of higher oil prices, rising interest rates, and disrupted shipments of various materials and other goods through the Strait of Hormuz because of the Iran conflict. Although costs have risen for many companies that consume a lot of oil, particularly transportation-related companies like airlines, truckers, and cruise lines, corporate America overall is less energy-intensive than in the past. Companies are also gaining productivity from AI adoption and limited hiring. And the energy sector, though less than 5% of S&P 500 profits, is expanding margins due to high oil and gas prices, helping to offset some of the margin pressures other industries are experiencing.

    In other words, the impact on margins from the Mideast conflict in the first quarter will likely be manageable, as is reflected in analysts’ estimates.

    Profit Margin Expectations Are Likely Overly Optimistic Given Tariffs and Mideast Disruptions

    Bar chart of S&P 500 operating margins from Q1 2024 to Q4 2025, along with estimates for Q1 2006 to Q4 2026, highlighting profit margin expectations are likely overly optimistic given tariffs and Mideast disruption.

    Source: LPL Research, FactSet 03/26/26
    Disclosures: Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested in directly. Estimates may not develop as predicted and are subject to change.

    Earnings Outlook for 2026 Still Bright

    As always, we want to pay more attention to management guidance for future quarters than to the backward-looking results from the prior quarter. In general, we expect management commentary to express greater uncertainty this quarter due to events in the Mideast and related uncertainty in the energy and rates markets. Companies with business models sensitive to oil and rates will likely strike a cautious tone in their outlooks even after reporting solid first quarter results. Nonetheless, bolstered by our energy independence, look for corporate America to impress in the first quarter.

    The second quarter may be more difficult. Results carry more uncertainty as disruptions to shipping traffic through the Strait of Hormuz could continue well into the current quarter (though our base case calls for a resolution in April). Assuming a resolution is reached sometime within the next few weeks, the economic impact would be limited. That leaves solid 2.5%-plus GDP growth, the OBBBA stimulus, and massive AI investments as big earnings drivers. Rising consensus estimates for this year and next also point to a robust earnings outlook.

    Bottom line, our high-single-digit S&P 500 earnings growth forecast for 2026, at $290 per share, is likely too low. We will strongly consider raising that forecast after earnings season is over and once there is greater clarity surrounding the resolution of the Mideast conflict. Our 10% S&P 500 earnings growth forecast for 2027, to $320 per share, looks reasonable given our macro forecasts.

    S&P 500 Earnings Estimates Keep Going Higher Despite AI, Mideast Concerns

    Line graph comparing 2026 consensus earnings per share estimates to 2027 amounts, highlighting &P 500 earnings estimates keep going higher despite AI, Mideast concerns.

    Source: LPL Research, FactSet 03/26/26
    Disclosures: Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested in directly. Estimates may not develop as predicted and are subject to change.

    Technical Analysis Perspective

    The broader market has moved into a more fragile state, with the S&P 500 now trading below both its widely followed 200‑day moving average (dma) and its November lows. Momentum has turned bearish, reflected in a consistent pattern of lower highs and lower lows over the past two months. Although oversold conditions are starting to emerge, most indicators have yet to reach the extreme levels that typically signal contrarian buying opportunities. For instance, only about 10% of S&P 500 stocks registered oversold Relative Strength Index readings on Friday, well below the +50% seen last April or the +20% levels observed during previous market corrections in recent years.

    Investor positioning reinforces this cautious backdrop. Data from VandaXAsset shows that combined U.S. equity positioning has turned negative but remains far from levels historically associated with major turning points. Retail investors have meaningfully de‑risked from elevated exposure earlier in the year, though last week offered early hints of renewed buy‑the‑dip behavior. Rising volatility and weakening price trends have prompted further de‑risking among institutional investors, who are not only net short the broader market but also materially short interest rates.

    Selling pressure has been widespread, and market internals continue to deteriorate. Only 43% of S&P 500 constituents remain above support from their November lows, with a similar share still holding above their 200‑dma. Breadth composition is also concerning, as defensive sectors have taken leadership. Technology, the market’s largest weight, has rolled over, while financials and consumer discretionary sit among the weakest areas in our technical work. A durable recovery will require renewed risk appetite across these sectors, along with meaningful technical improvements.

    An Uncomfortable Spot for Stocks

    Two panel chart comparing S&P 500 and its 200-day moving average from January 2021 to March 2026 in panel one, and the percentage of S&P 500 stocks above their 200-day moving average from January 2021 to March 2026 in panel two.

    Source: LPL Research, Bloomberg 03/26/26
    Disclosures: All indexes are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results.

    Bottom line: The longer‑term bull market trend remains intact, but technical signals increasingly point to further downside risk for equities. While the recent deterioration in the S&P 500 has been meaningful, it has not yet reached the type of extremes that typically justify a contrarian stance. The index’s current discount has also failed to attract meaningful demand, as investors across the board continue to de‑risk. We continue to believe a buying opportunity will develop, but at this stage the risk‑reward profile does not warrant action. Below are six key technical indicators we are monitoring for signs of a potential inflection:

    1. Oil is in the driver’s seat of risk appetite. Price stability in oil markets is key for a durable rebound in stocks. Brent crude falling below support at $98 would be a step in the right direction, especially if accompanied by a compression in longer-dated Brent futures contracts, which are still pricing in a higher-for-longer regime. In addition, implied volatility in oil will need to materially come down from historically high levels.
    2. More widespread oversold conditions. Oversold conditions across equity markets are emerging, but most indicators have not yet entered washed-out territory.
    3. Sentiment and positioning at capitulation levels. Bearish sentiment and investor positioning have not fallen to levels consistent with previous turning points. Stocks beginning to rise on relatively negative news would indicate that downside risks have been largely priced in.
    4. Improvement in market breadth. With fewer than half of S&P 500 constituents currently in uptrends, a move back above the 50% threshold in our trend model would signal improving internal strength.
    5. Rotation back toward cyclical leadership. A clear shift away from defensive leadership and back toward cyclical sectors would indicate renewed risk appetite.
    6. Stability in interest rates. 10‑year Treasury yields holding below the 4.50–4.60% resistance range and a decline in 2‑year yields below the Federal Reserve’s 3.75% target rate would provide a more supportive backdrop for stocks.

    Conclusion

    Despite the near‑term uncertainty created by the Mideast conflict and its impact on oil, interest rates, and supply chains, the fundamental earnings backdrop remains constructive. Corporate America continues to demonstrate impressive resilience, supported by strong demand trends, massive AI‑driven investment, and fiscal stimulus, all of which position S&P 500 earnings for another year of solid growth. While management guidance may reflect understandable caution this quarter, the underlying drivers of profitability remain intact.

    At the same time, technical conditions argue for patience. Market internals have weakened, investor positioning is defensive, and oversold signals have yet to reach levels that typically mark durable turning points. Together, these dynamics suggest that while the longer‑term outlook is favorable, the near‑term path may remain bumpy. As clarity around geopolitical developments improves and volatility subsides, the foundation appears set for earnings to reassert themselves as the primary driver of market direction.

    Asset Allocation Insights

    LPL’s Strategic Tactical Asset Allocation Committee (STAAC) maintains its tactical neutral stance on equities. As the war in Iran continues and oil prices have moved sharply higher, investors may be well served by bracing for additional volatility. The stock market’s resilient track record during geopolitical crises is reassuring, leaving STAAC to look for opportunities to potentially add equities at lower levels rather than remove equities due to what will likely be relatively short-term market disruption.

    STAAC’s regional preferences across the U.S., developed international, and emerging markets (EM) are aligned with benchmarks. Attractive valuations in non-U.S. equities are offset by upward pressure in the U.S. dollar, although the Committee continues to watch EM closely for opportunities due to improvements in fundamentals and the technical analysis picture pre-Iran conflict.

    The Committee still maintains a slight preference for growth over value tilt and large caps over small caps. In terms of domestic sectors, communication services remains an overweight, while the industrials sector was recently upgraded to overweight based on strong earnings momentum, technical trends, and tailwinds from fiscal spending and AI-driven investment.

    Within fixed income, the STAAC holds a neutral weight in core bonds, with a slight preference for mortgage-backed securities (MBS) over investment-grade corporates. The Committee believes the risk-reward for core bond sectors (U.S. Treasury, agency MBS, investment-grade corporates) is more attractive than plus sectors. The Committee does not believe adding duration (interest rate sensitivity) at current levels is attractive and remains neutral relative to benchmarks.

    Adam Turnquist, Chief Technical Strategist, LPL Financial

    Jeffrey Buchbinder, Chief Equity Strategist, LPL Financial

    You may also be interested in:

  • Weekly Market Performance | March 27, 2026

    LPL Research
    Last Updated: 

    LPL Research provides its Weekly Market Performance for the week of March 23, 2026. U.S. and global equity markets finished the week mostly lower as geopolitical uncertainty in the Middle East continued to drive volatility across regions and asset classes. Equities were whipsawed by shifting hopes for de‑escalation, choppy energy prices, and renewed pressure on large‑cap technology stocks, while Treasury yields moved higher amid weak auction demand and elevated inflation expectations. International markets were mixed, with Europe showing relative resilience and most Asian markets declining, as investors remained highly sensitive to developments affecting global energy supplies. In commodities, crude oil was little changed, and in currencies, the dollar strengthened and the yen weakened near key levels.

    Stock Index Performance

    Index Week-Ending One Month Year to Date
    S&P 500 -2.06% -7.36% -6.91%
    Dow Jones Industrial -0.79% -7.68% -5.92%
    Nasdaq Composite -3.09% -7.45% -9.73%
    Russell 2000 0.58% -6.83% -1.18%
    MSCI EAFE 0.09% -11.11% -2.46%
    MSCI EM -1.02% -11.99% 0.67%

    S&P 500 Index Sectors

    Sector Week-Ending One Month Year to Date
    Materials 4.26% -9.02% 7.02%
    Utilities 3.03% -3.88% 7.00%
    Industrials -1.01% -9.78% 2.89%
    Consumer Staples 1.33% -8.19% 6.48%
    Real Estate -0.70% -8.28% 0.10%
    Health Care -0.73% -10.07% -7.16%
    Financials -1.89% -6.56% -12.48%
    Consumer Discretionary -1.76% -8.65% -12.14%
    Information Technology -3.37% -6.29% -11.54%
    Communication Services -6.98% -11.41% -11.18%
    Energy 6.26% 12.57% 40.04%

    Fixed Income and Commodities

    Indexes and Commodities Week-Ending One Month Year to Date
    Bloomberg U.S. Aggregate -0.08% -2.46% -0.76%
    Bloomberg Credit 0.00% -2.63% -1.20%
    Bloomberg Munis -0.64% -2.55% -0.41%
    Bloomberg High Yield 0.01% -1.49% -0.81%
    Oil 1.18% 48.43% 73.25%
    Natural Gas 0.00% 8.25% -16.03%
    Gold 0.62% -14.37% 4.65%
    Silver 3.52% -25.00% -1.85%

    Source: LPL Research, Bloomberg 3/27/26 @3:19 p.m. ET
    Disclosures: Indexes are unmanaged and cannot be invested in directly.

    U.S. and International Equities

    U.S. Equities: Headlines remained volatile and noisy over the last full week of March, leaving the S&P 500 below the weekly flatline as equity markets continued to broadly be driven by geopolitical headlines and their directional impact on oil prices. Losses were relatively measured, however, as major U.S. averages traded in positive territory for the majority of the week on de-escalation hopes. Risk appetite was lifted after President Trump stated that Washington and Tehran had “very productive” talks on ending hostilities in the Middle East, and halted attacks on energy infrastructure before delivering a 15-point peace proposal to Iran. Equities held gains on the signals that Washington may be serious about winding down the conflict via the credible off-ramp, but Iran’s denial of peace talks, rejection of the ceasefire proposal, and bounce in crude prices kept a lid on stocks.

    Despite the White House extending its pause of attacks, de-escalation doubts continued to weigh on already fragile sentiment, with a slide in big tech names exacerbating losses at the index level. Shares of social technology giant Meta (META) sold off after being ruled liable for addictive social media products, alongside Alphabet (GOOG/L), which separately sparked declines in memory and chipmakers after unveiling a new algorithm that may reduce memory needs for artificial intelligence. A continued backup in Treasury yields and Brent crude prices rising near $110 per barrel were also flagged as headwinds for stocks due to the subsequent inflation and economic jitters, which led to continued selling Friday as U.S. and Israeli defense forces struck Iranian nuclear sites and steel facilities.

    International Equities: Across the pond, the European STOXX 600 held gains despite selling pressure over the latter half of the week. The regional benchmark jumped late in Monday trading in response to reported U.S.-Iran peace talks, and persevered through climbing energy prices the rest of the week to stay above the weekly unchanged point. Mid-week gains were a bright spot as bulls waded into the market on assurance from European Central Bank President Christine Lagarde that a rate hike is not penciled in at this time, but central bankers will respond swiftly if inflationary pressures rise. Nonetheless, stocks eased into the weekend on chatter around increasing headwinds the longer energy prices remain elevated, as well as the Bank of France lifting inflation expectations and cutting its growth forecast due to the conflict.

    Asian stocks ended mostly lower, with just Japan and Australia bucking the trend among major markets. Like the U.S. and Europe, the Asia-Pacific region remained highly sensitive to developments out of the Persian Gulf, with fluctuating hopes of a restored flow of oil out of the Strait of Hormuz driving choppy trading. South Korea faced the most downside pressure on chip and memory share weakness following the GOOG/L news, while losses for greater China were capped by state media reports of a jump in homegrown artificial intelligence model adoption earlier in the week.

    Fixed Income, Currency, and Commodity Markets

    Fixed Income: Core bonds, measured by the Bloomberg Aggregate Index, traded slightly lower this week. Despite the rise in Treasury yields over the past month, this week’s auctions were, by many measures, disappointing. The Treasury Department auctioned off $183 billion (total) in two-year, five-year, and seven-year notes this week, and demand for each auction came in among the lowest levels of the year with demand for the two-year auction the lowest in two years. Moreover, in each auction the Treasury was forced to pay more than market expectations to generate even this muted level of demand. The weak auction results largely reflect heightened uncertainty surrounding the ongoing Iran conflict and a near‑term increase in inflation expectations. Short‑term inflation expectations continue to rise, and market-implied expectations for Fed rate cuts have shifted to probabilities of rate hikes extending into June 2027. Importantly, longer-term inflation expectations remain well anchored, which suggests the Fed is in no need to actually increase rates right now.

    Despite this week’s weak Treasury auction results, we do not believe we are on the precipice of an outright buyers’ strike. With yields approaching key psychological levels — around 5% on the 30‑year and 4% on the two‑year — we expect incremental demand to emerge, given current market pricing for Fed policy, even if those thresholds are temporarily breached. In other words, absent a meaningful un-anchoring of long‑term inflation expectations, we see limits to how much further yields can rise.

    Commodities and Currencies: The broader commodities complex traded slightly lower this week after bouncing off mid-week lows. Crude oil prices didn’t budge from the commodities spotlight again, but price momentum did cool as both West Texas Intermediate (WTI) and Brent crude prices posted moderate week-to-date moves. While rising in recent sessions on de-escalation doubts from investors, crude struggled to fully recover from Monday’s steep drop triggered by reported U.S.-Iran ceasefire talks. Nonetheless, the Strait of Hormuz remained bottlenecked (Iran did allow 10 tankers to traverse the waterway as a show of goodwill) as the conflict dragged on, leaving prices elevated its length remains unclear and U.S. insurance programs have yet to begin. Gold prices also remained choppy as ceasefire hopes whipsawed, but the yellow metal ultimately traded modestly higher Friday afternoon. Silver traded higher thanks to a positive Friday session, while the U.S. Dollar Index strengthened against its peers after shrugging off early weakness. The Japanese yen also made headlines as potential currency intervention by Tokyo remains on the table while lingering near key levels versus the U.S. dollar.

    Economic Weekly Roundup

    The economic calendar was relatively quiet over the last five days with high-profile prints slated for next week at the start of the new month. The headline of this week’s reports was arguably Friday’s release of the latest consumer sentiment report from the University of Michigan. While the gauge was revised lower than consensus expected for the month of March, the drop was not extreme and did not come as a major shock to investors as dented consumer sentiment was generally to be expected given ongoing inflation angst driven by higher oil prices. Also released this week was initial jobless claims arriving in line with expectations while continuing claims declined, and a slight miss in preliminary composite economic activity data on the back of weaker services results. However, both the manufacturing and services Purchasing Managers’ Indexes remained in expansion.

    The Week Ahead

    The following economic data is slated for the week ahead:

    • Monday: Dallas Fed Manufacturing Activity (Mar)
    • Tuesday: FHFA House Price Index (Jan), S&P Case-Shiller 20-City and National Home Price Indexes (Jan), MNI Chicago PMI (Mar), Conference Board Consumer Confidence report (Mar), JOLTS Jobs report (Feb), Dallas Fed Services Activity (Mar)
    • Wednesday: MBA Mortgage Applications (Mar 27), ADP Employment Change (Mar), Retail Sales (Feb), S&P Global U.S. Manufacturing PMI (Mar final), ISM Manufacturing (Mar), Business Inventories (Jan), Wards Total Vehicle Sales (Mar)
    • Thursday: Challenger Job Cuts (Mar), Trade Balance (Feb), Initial Jobless Claims (Mar 28), Continuing Claims (Mar 21)
    • Friday: Change in Nonfarm, Private, and Manufacturing Payrolls (Mar), Average Hourly Earnings (Mar), Average Weekly Hours All Employees (Mar), Unemployment Rate (Mar), S&P Global U.S. Services and Composite PMIs (Mar final)

    Important Disclosures

    This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

    Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

    Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

    This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

    Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

    Asset Class Disclosures –

    International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

    Bonds are subject to market and interest rate risk if sold prior to maturity.

    Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

    Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

    Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

    Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

    High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

    Precious metal investing involves greater fluctuation and potential for losses.

    The fast price swings of commodities will result in significant volatility in an investor’s holdings.

    This research material has been prepared by LPL Financial LLC.

    Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

    For Public Use – Tracking: #1084551

  • Energy Stocks Vary Across Market Cycles

    Energy Stocks Don’t Act the Same in Every Cycle

    Thomas Shipp | Head of Equity Research
    Last Updated: March 26, 2026

    Perspectives on The Energy Sector and Underlying Sub-Sectors

    Energy cycles have a way of rewarding investors who show up early, while punishing those who assume the next upturn will look exactly like the last one. Supply disruptions caused by the war in Iran that began just under a month ago have upended markets globally, with oil markets taking center stage. My colleagues Kristian Kerr and Adam Turnquist have each written pieces this month digging into the physical oil market, “Assessing the Impact of Developments in Iran: Watch Energy” and “Oil in the Driver’s Seat as Geopolitical Tensions Rise”, respectively. Our focus is on the equities that are in the oil and gas business (energy stocks), focusing on the individual sub-sectors within the broader energy sector. Energy was the best-performing sector in the S&P 500 before the war broke out, and investor interest has increased as they attempt to underwrite the new geopolitical environment.

    Energy investing is rarely hard because the math is complicated, but because cycles mess with judgment. When oil is cheap and the sector is hated, it feels irresponsible to touch it. When oil is expensive and headlines are everywhere, it suddenly feels like the simplest trade in the world. That’s typically when investors take the most risk for the least incremental reward.

    As with most investing topics, we think the right way to approach energy equity analysis is as a mosaic, with the mind and machine working together to weigh the evidence. You don’t need one perfect indicator, but a set of clues that improve your odds of avoiding two classic mistakes in energy: showing up too late and leaning into the wrong subsector for the environment. What follows is a brief review of energy subsector performance and a framework for thinking about which sub-sectors tend to lead at the onset of an energy investment cycle, including a zoom in on energy sub-sector performance from December’s WTI crude oil closing low to date, with a focus on the before and after of the onset of the Iran War. Finally, we provide a brief overview of each of the main energy sub-sectors.

    Energy Stocks Don’t Act the Same in Every Cycle

    Many assume investing in energy stocks (oil and gas stocks, specifically) is simply one trade based on oil and gas prices. In reality, the energy complex is a collection of very different businesses that respond to different triggers. Some are in fact closely tied to commodity prices, while others are more closely tied to activity levels like exploratory drilling or producing refined energy products like diesel fuel and gasoline. Still others behave more like long duration cash flow machines where contract structure and capital allocation matter more than the spot price of oil.

    That distinction matters because the market does not reward oil exposure the same in every cycle. Oil prices are typically the catalyst, but spending and activity are typically the factors that drive value-creation (and destruction) throughout the cycle, and therefore are key to uncovering equity leadership.

    To provide a baseline on where we are today, in terms of leadership, we highlight the broad-based energy sector and individual sub-sector stock index performance on a near-term basis in the “Refiners Have Outperformed Over the Last Year, While Midstream (Pipelines) and E&Ps Lagged” chart and on a longer-term lookback in the “Long Term Energy Sector and Sub-Sector Price-based Index Returns” chart.

    Refiners Have Outperformed Over the Last Year, While Midstream (Pipelines) and E&Ps Lagged

    Line graph comparing the energy sector to subsectors from March 2025 to March 2026, highlighting refiners have outperformed over the last year.

    Source: LPL Research, Bloomberg 03/24/26
    Disclosures: S&P 1500 Energy Sector / Sub-Sector Indexes: Cumulative Price Returns (Monthly, December 2001– March 24, 2026), Indexed at 100 as of (Daily, Trailing One Year), Indexed at 100 as of 3/24/2025. All indexes are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results. Estimates may not materialize as predicted and are subject to change.

    Long Term Energy Sector and Sub-Sector Price-based Index Returns

    Line graph comparing the energy sector to subsectors performance from December 2001 to December 2025.

    Source: LPL Research, Bloomberg 03/24/26
    Disclosures: S&P 1500 Energy Sector / Sub-Sector Indexes: Cumulative Price Returns (Monthly, December 2001– March 24, 2026), Indexed at 100 as of 04/29/2005 (Earliest point with data for all indexes). All indexes are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results. Estimates may not materialize as predicted and are subject to change.

    A Practical Road Map of What Tends to Lead Based on Cycle

    The oilfield services (OFS) sector is often considered the “tip of the spear” in terms of an inflection in oil and gas activity. The sector generally leads out of the gates in an upcycle, followed by (or concurrently with) the E&Ps. While there is certainly truth in that, we prefer a more conditional way of describing leadership, depending on what the market believes about the duration of the move in oil prices. A helpful way to structure this thought process is based on how the sector reacts to three different views on the duration of the oil move, and how we characterize the returns generated by those views.

    1. If oil rises but investors don’t trust it, the market often prefers short-cycle commodity exposure like certain exploration and production companies (E&Ps) and treats the move as a trade. These businesses move most with oil and gas prices and the forward curve. We characterize the returns here simply as “oil beta”.
    2. If oil rises and the market starts believing it, leadership often shifts toward activity and pricing power. This is where OFS stocks will typically lead and outperform. These businesses benefit when industry spending rises and the service supply chain tightens. The equity upside historically has come not just when revenue climbs, but when utilization tightens and pricing power shows up via higher margins.
    3. If the cycle persists and broadens into international/offshore, the market starts to focus on visibility and leadership can shift again toward backlog, project awards, and execution. In other words, the parts of the ecosystem that benefit from long lead-time investment. Large service platforms, offshore/subsea participants with backlog, many integrated majors, and midstream “toll-road” models often show up here.

    Since the recent pre-war lows in oil prices on December 16, 2025, energy equities have largely moved with oil. The notable standout was OFS, which tends to move with oil as a cycle develops, but moved well ahead of the commodity leading up to the war, though has underperformed since the war broke out due to disruptions in ongoing activity in the Middle East. The outperformance of the commodity relative to the stocks since the war broke out is not surprising given the physical nature of the supply disruption (highlighted in the “WTI Crude Oil Prices Have Outpaced Energy Equities Since War Broke Out” chart). However, we also believe this may point to the market not trusting the commodity move (scenario #1), and thus there is room for catch-up potential should oil prices sustain higher levels. In other words, we don’t think it’s too early to consider certain energy sub-sectors.

    WTI Crude Oil Prices Have Outpaced Energy Equities Since War Broke Out

    Line graph comparing WTI crude oil prices to energy and subsectors performance from December 2025 to March 2026.

    Source: LPL Research, Bloomberg 03/24/26
    Disclosures: WTI Crude Oil (Generic Rolling Front Month Futures Contract) and S&P 1500 Energy Sub-Sector Indexes: Cumulative Price Returns (Daily, 12/16/2025–03/24/2026), Indexed at 100 as of 12/16/2025 (Recent low in WTI Crude Oil). All indexes are unmanaged and cannot be invested in directly. Past performance is no guarantee of future results. Estimates may not materialize as predicted and are subject to change.

    Energy Sub-Sector Cheat Sheet

    In this brief closing section, we provide high-level definitions of the sub-sectors that make up the broader energy sector, important performance indicators to watch in each sub-industry, and what typically drives returns in the stocks. Think of this as a sort of CliffsNotes (do those still exist?) for the energy sector to help map the terrain and chart the course for a deeper-dive analysis.

    Energy Equipment and Services (Oilfield Services, or OFS)

    What they do: Provide the tools, equipment, technology, and labor that help producers drill wells, complete wells, and maintain or enhance production. This category ranges from drilling services to production chemicals to subsea systems.

    What to watch:

    • Customer, i.e., oil and gas companies’ capital expenditures (capex) plans and commitments (FIDs, or “Final Investment Decisions” for large, long-cycle mega projects)
    • Rig and completion activity
    • Service pricing commentary
    • Increases (or decreases) in sequential operating margins (signs of pricing power, or lack thereof)
    • Offshore rig day rates, contract awards, backlog and order intake for longer-cycle businesses (contract drillers, subsea equipment and surface capital equipment, project services)

    What drives returns: Industry spending (capex), asset (rigs, equipment, etc.) and crew (labor) utilization, and pricing power. OFS companies have historically driven strong operating leverage when demand tightens.

    Exploration and Production (Upstream Oil and Gas, or E&Ps)

    What they do: Simplistically, find and produce oil and gas. Their revenue is tied directly to commodity prices and production volumes, while cost structures are largely driven by service costs (revenue for OFS companies), labor, and land acquisition/leases and royalties to land owners/partners.

    What to watch:

    • Reinvestment rate, i.e., how much cash flow goes back into drilling
    • Balance sheet leverage (debt)
    • Breakevens (cash or accounting-based operating costs, capex, and sometimes dividends). Typically stated in dollars per barrel of oil or per million British Thermal Units of natural gas (MMBtu).
    • Decline rates, or the percentage annual reduction in production from an oil or gas field from its peak
    • Payout framework (dividends/buybacks) and whether it holds through commodity volatility

    What drives returns: Commodity prices, the hedge book (how much production revenue is “locked in” at a pre-determined price), reinvestment discipline, and capital returns.

    Storage and Transportation (Midstream Oil and Gas)

    What they do: Move, process, and store oil and gas. Many midstream businesses resemble toll roads in that they are paid for volumes moved and contracted services, often with less direct commodity exposure.

    What to watch:

    • Contract structure and duration
    • Customer concentration (who pays them)
    • Leverage and refinancing risk
    • Volume outlook by basin and product (oil vs gas vs natural gas liquids (NGLs))

    What drives returns: Contract quality, volume stability, counterparty health, and balance sheet management.

    Marketing and Refining (Downstream Oil and Gas)

    What they do: Turn crude oil into products like gasoline, diesel, and jet fuel. Refiners are not a pure bet on oil prices, but typically a bet on product margins (i.e., crack spreads, or the difference between crude input costs and product selling prices).

    What to watch:

    • Product inventory levels (gasoline/diesel)
    • Unplanned outages and maintenance cycles
    • Demand seasonality
    • Regulatory changes that affect blending or capacity

    What drives returns: Crack spreads, inventories, outages, regulations, and global refining capacity utilization.

    Integrated Oil and Gas Companies (IOCs)

    What they do: Operate across the value chain, including upstream production, midstream logistics, and downstream refining/marketing (and sometimes chemicals). The integrated model can smooth earnings across cycles.

    What to watch:

    • Project pipeline and cost discipline
    • Dividend and stock buyback sustainability through the cycle
    • Downstream margin sensitivity (refining can help or hurt depending on conditions)
    • Geopolitical exposure and fiscal terms in key regions (jurisdiction matters in a global industry)

    What drives returns: Upstream prices, downstream margins, project execution, and capital allocation.

    Additional disclosure: The S&P Composite 1500® Energy comprises those companies included in the S&P Composite 1500 that are classified as members of the GICS® Energy sector.

    Important Disclosures

    This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

    Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

    Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

    This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

    Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

    Asset Class Disclosures –

    International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

    Bonds are subject to market and interest rate risk if sold prior to maturity.

    Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

    Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

    Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

    Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

    High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

    Precious metal investing involves greater fluctuation and potential for losses.

    The fast price swings of commodities will result in significant volatility in an investor’s holdings.

    This research material has been prepared by LPL Financial LLC.

    Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

    For Public Use – Tracking: #1084398

  • Taking a Look at Gold’s Stumble

    What’s Driving Gold’s Stumble? Checking Underneath the Tape

    Adam Turnquist | Chief Technical Strategist
    Last Updated: March 24, 2026

    Additional content provided by Brian Booe, Associate Analyst, Research.

    As the U.S.-Iran conflict and de facto closure of the Strait of Hormuz enters its fourth week, market participants continue to search for some blue sky through the fog while remaining sensitive (in both directions) to fluid headlines flowing out of Washington and the Persian Gulf. While likely not comfortable for most investors, capital markets have generally reacted as one would expect given the major factors of the event — global equities faced downward pressure as oil prices surged and sovereign bond yields have moved higher as a result of energy-driven inflation worries. Yet an unlikely surprise has been gold.

    The yellow metal is widely regarded as a favorite among safe haven and inflation hedges, but after ending February just shy of $5,200/ounce, bullion prices are down 21% over the course of the conflict and are nearly 27% off late January’s all-time highs — even posting its worst week since 1983 last week. Outside of the initial spike at the onset of the conflict, this move has been somewhat counter intuitive given gold’s long-term historical patterns. But when checking a layer or two below the tape, the calculus adds up.

    Not Solely Trading on Geopolitical Headlines

    While the metal does have some well-known historical tendencies, at times, it can break free of these longstanding patterns and trade to its own tune, reflective not in surface-level drivers but the deeper plumbing of the market. The effective closure of the Strait of Hormuz, combined with surging crude oil prices and rising inflation fears, lifted U.S. Treasury yields, pushed out expectations for rate cuts, and strengthened the U.S. dollar, a move amplified by last week’s hawkish‑leaning Federal Reserve press conference. The collision of these dynamics makes for a notable headwind in gold’s relative attractiveness, which experiences a rising opportunity cost when expectations of higher-for-longer rates increase (gold doesn’t pay interest). Simultaneously, dented risk appetite stemming from the inflation and economic growth angst pushed traders to cover their losses in other areas of the market, meet margin calls, triggered stop-loss levels, and sparked a broad dash for cash via locking in gains from profitable positions in technically overbought gold after a record setting 2025 and start to 2026 (as shown below in the middle panel).

    Gold Prices Slump Amid Middle East Conflict

    This line chart provides the gold spot.

    Source: LPL Research, Bloomberg 03/24/26
    Disclosures: Past performance is no guarantee of future results.

    Perhaps the most noteworthy of the under-the-surface drivers, in our view, is the decoupling of bullion’s correlation with real yields. After a few year stretch in which gold and Treasury yields traded in an unusual tandem, gold appears to be reverting back to its theoretically and historically correct negative correlation with real yields (when real yields are negative or trending lower, gold shines for better capital preservation relative to bonds, and vice versa).

    Looking Ahead

    Zooming out from this month’s pullback, we believe the outlook for the yellow metal remains constructive. Despite some calls across Wall Street that bullion may be losing its store of value appeal, we believe this is unlikely. Previous market shocks in 2008, 2020, and 2022 saw gold initially fall. This time, the move was exacerbated by a run up in volatility since mid-January (as shown above in the bottom panel), undermining gold’s store of value characteristics in the short-term amid herding and momentum dynamics, retail buying, and investors seeking an everything hedge, which led to nervous trading and sharply overbought conditions. Plus, emerging market (EM) central banks were forced to defend their currency against the U.S. dollar’s rally, a factor which may persist in the short term.

    But after a healthy repricing, fundamental factors remain in place. Gold continues to garner support from central bank buying, after becoming the second-largest foreign reserve asset, with the vast majority of global central bankers expecting gold reserves to moderately increase over the next five years driven by demand for diversification. Further, physical buying across Asia and EM and ballooning global deficits support gold. On a technical note, ETF flows now point to a net outflow this year and, as shown above, positioning has swiftly reached oversold levels as measured by the 14-day relative strength index (RSI) which could draw in contrarian buyers. Further, while immediate-term headwinds may linger alongside geopolitical uncertainty, the yellow metal has held its 200-day moving average (dma) to start the week, thus far passing a big technical test for its long-term trend. If this level holds, it would suggest downside risks may be limited from here and that gold may move onto more even footing, but the dollar remains a wildcard, which could pressure the yellow metal if recent strength continues.

    Important Disclosures

    This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

    Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

    Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

    This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

    Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

    Asset Class Disclosures –

    International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

    Bonds are subject to market and interest rate risk if sold prior to maturity.

    Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

    Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

    Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

    Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

    High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

    Precious metal investing involves greater fluctuation and potential for losses.

    The fast price swings of commodities will result in significant volatility in an investor’s holdings.

    This research material has been prepared by LPL Financial LLC.

    Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

    For Public Use – Tracking: #1083758

  • Why the U.S. Dollar Remains a Safe Haven

    Dr. Jeffrey Roach | Chief Economist
    Last Updated: March 24, 2026

    Dollar Grows Stronger

    The recent appreciation of the U.S. dollar (USD) against most currencies reflects investors’ assessment that the U.S. economy offers a uniquely strong combination of relative growth resilience, higher returns, and financial-system credibility. Compared with other advanced economies, the United States continues to exhibit firmer growth, a more flexible labor market, and a Federal Reserve (Fed) committed to price stability. At the same time, global uncertainty has reinforced demand for deep, liquid dollar‑denominated assets, which remain the primary source of safe and scalable collateral. As capital flows toward the U.S. for both return and safety — and away from lower‑growth, lower‑yield, or policy‑constrained economies — the dollar strengthens broadly, signaling that global investors continue to rank the U.S. economy as a relatively safe haven.

    U.S. Dollar Appreciated Across Most Currencies

    Line graph comparing the U.S. dollar to Swiss franc, the euro, and Japanese yen from May 2025 to March 2026.

    Source: LPL Research, Federal Reserve Board, 03/23/26
    Disclosures: Past performance is no guarantee of future results.

    Why Has the Dollar Outperformed During the Middle East Shock?

    There are some historical examples that explain why we have seen a dollar appreciation against most currencies during times of global stress. Like the 1990s, the U.S. economy has stronger relative growth and productivity than other major trading partners. The U.S. growth trajectory, for example, is stronger than in Europe and Japan. We see stronger corporate profitability and higher returns on invested capital. These factors legitimize safe‑haven flows.

    Further, like the post‑Great Financial Crisis (GFC) era, we see dollar liquidity dominance. The dollar is still the primary trade invoicing unit, foreign exchange (FX) hedging benchmark, and global collateral asset. Dollar strength tightens non‑U.S. financial conditions disproportionately. As we monitor the dollar, we must keep our eyes on the Fed.

    After Chair Powell Retires

    If nominee Kevin Warsh is unconfirmed when Chair Powell’s term expires, Mr. Powell will most likely become Chair Pro-tempore. Fed credibility is a key factor to gauge the likely persistence of dollar performance during times of crisis, and strong leadership is necessary for maintaining credibility. The loss of the Fed’s reaction-function credibility could become a powerful trigger in a regime shift in the dollar. When the Fed loses market credibility, investors no longer believe the Fed will prioritize price stability over accommodation. Or, inflation is no longer treated as mean‑reverting under the policy framework. What this looks like technically is inflation risk premia rises. The term premium steepens independently of growth, and the dollar weakens even as U.S. yields rise.

    Amid global uncertainty, Fed officials need to maintain their credibility and independence.

    The Tell-Tale Market Signature of a Real Regime Shift

    If a dollar regime shift has started, you will observe at least these four signals. First, the USD weakens against both high‑beta and safe‑haven currencies. Second, U.S. yields rise without FX support. Third, foreign assets outperform in local currency and USD terms. Fourth, volatility rises without a flight into the dollar. Some events may give a false signal. Fed easing cycles could weaken the dollar but may not be sufficient for a real regime shift.

    Given the current path of future easing, let’s end with a few counterintuitive examples of dollar strength amid lower fed funds.

    U.S. rate cuts have supported the dollar at several points in history — not because lower rates are dollar‑positive mechanically, but because the cuts improved the U.S. outlook relative to the rest of the world or stabilized global risk. The key is context. Here are the cleanest examples.

    First, is the 1998 Asian and Russian crisis along with Long Term Capital Management (LTCM). The Fed cut rates three times in late 1998 to contain global financial stress. The cuts stabilized U.S. growth while much of Asia and parts of Europe were in crisis. Global investors increased exposure to U.S. assets as the safest large market. The dollar strengthened despite easier policy, especially versus emerging markets (EM), and the euro’s predecessors.

    The second period was the post‑dot‑com recession in 2001–2002. The Fed aggressively cut rates after the tech bust, and these cuts helped limit the depth of the U.S. downturn. Capital continued to flow into U.S. markets because alternatives were weaker. The dollar stayed strong initially and only weakened later once global growth recovered.

    A third period was during the early phases of the GFC in 2008.

    In the initial stage of the GFC, the Fed began cutting rates before other central banks. Markets interpreted the cuts as crisis containment, not policy weakness. The dollar rose sharply during late 2008 and 2009, even as rates fell.

    However, cuts usually weaken the dollar when they signal a loss of inflation control, a fiscal or institutional breakdown, or a permanent deterioration in U.S. returns relative to the rest of the world.

    Concluding Thoughts

    The current appreciation of the U.S. dollar is being driven by a confluence of several factors. Here are the key drivers:

    First, the U.S. economy continues to appear stronger and more adaptable than most peers, particularly Europe and Japan. U.S. consumers, labor markets, and corporate earnings have held up better, which keeps global capital oriented toward U.S. assets, even late in the cycle.

    Second, U.S. central bank rates remain higher than in other advanced economies, and the Fed is viewed as more credible in maintaining price stability. That combination makes the dollar attractive, not just as a safe haven, but as a return‑generating currency.

    Third, investors continue to favor assets that offer unmatched depth and liquidity. U.S. Treasuries remain the world’s primary source of scalable, high‑quality collateral, and demand for them supports the dollar even when risk sentiment deteriorates. Notably, the dollar is appreciating relative to other traditional havens like the yen and Swiss franc, reflecting a preference for liquidity and market depth over low‑yield safety.

    Fourth, as a major energy producer and net exporter of petroleum products, the U.S. has benefited from relatively favorable export‑to‑import price dynamics. Stable energy prices boost U.S. real income and margins, while hurting energy‑importing economies, reinforcing dollar strength through improved relative purchasing power and resilience.

    Bottom line: The dollar is strengthening because global investors see the U.S. as offering the best mix of returns, safety, and liquidity. Until one of those pillars breaks, most likely via a loss of policy credibility or a meaningful reversal in relative growth, the forces supporting dollar appreciation are likely to remain intact.

    Important Disclosures

    This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

    Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

    Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

    This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

    Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

    Asset Class Disclosures –

    International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

    Bonds are subject to market and interest rate risk if sold prior to maturity.

    Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

    Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

    Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

    Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

    High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

    Precious metal investing involves greater fluctuation and potential for losses.

    The fast price swings of commodities will result in significant volatility in an investor’s holdings.

    This research material has been prepared by LPL Financial LLC.

    Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

    For Public Use – Tracking: #1083018

  • Private Credit Under Pressure: Liquidity Mismatches in an AI-Disrupted Cycle

    Private Credit Under Pressure: Liquidity Mismatches in an AI-Disrupted Cycle

    PRINTER FRIENDLY VERSION

    Corporate credit markets have become unsettled about the potential for advanced agentic AI tools from firms such as Anthropic and OpenAI to automate functions across legal, analytical, marketing, and sales workflows, effectively targeting the software as a service (SaaS)/enterprise software space.

    Those concerns are highest within the private credit market, and that market is confronting its most meaningful stress test since becoming a dominant source of non‑bank financing, with an emerging wave of redemption pressure providing the clearest early signal of underlying liquidity mismatches.

    The suspension of redemptions across several large non‑traded vehicles has exposed how appraisal‑based valuations, limited secondary‑market liquidity, and concentrated exposures in enterprise software can interact in a higher‑rate environment.

    These events are occurring against a macro backdrop defined by tighter financial conditions for some, weakening borrower fundamentals, and accelerating AI‑related disruption, all of which are challenging the optimistic underwriting assumptions embedded in loans originated mostly during the 2020–2021 cycle.

    As redemption requests rise and managers respond through asset sales, return‑of‑capital programs, or permanent gating, we continue to advocate for investing in managers who apply disciplined, conservative valuation methodologies, with portfolios composed of senior secured debt securities.

    What is Private Credit?

    Private credit is a broad asset class that is roughly $40 trillion in size and encompasses non-bank lending and debt investments that are not publicly traded. Unlike bonds issued in public markets, private credit transactions are negotiated directly between borrowers and investors, resulting in bespoke structures tailored to the specific needs of each deal. The asset class spans several strategies, including mezzanine financing, real estate debt, distressed debt, and asset-backed lending — and while most of the categories listed above are still in very solid positions, direct lending, which is a small piece of the private credit ecosystem, is the area that has been in the headlines recently.

    At its core, direct lending involves non-bank lenders — typically alternative asset managers — providing senior secured loans directly to middle-market companies. These businesses are generally too large to rely solely on community banks yet too small to access broadly syndicated loan (BSL) markets efficiently. Direct lenders step into this gap, offering speed, certainty of execution, and flexible structures that traditional capital markets struggle to match.

    The loans generated through direct lending are typically floating-rate instruments, tied to benchmarks such as SOFR (secured overnight financing rate), which generally become more attractive to investors as interest rates rise but more onerous to borrowers as interest expenses rise as well. They are also senior in the capital structure, meaning lenders hold the first claim on borrower assets in a default scenario. This combination of seniority, collateralization, and floating-rate income has made direct lending particularly attractive to institutional investors — pension funds, insurance companies, and endowments — seeking income with meaningful risk mitigation.

    Unintended Consequences?

    The Volcker Rule, part of the Dodd-Frank Act implemented after the 2008 financial crisis, prohibited large banks from engaging in proprietary trading and significantly restricted their ability to sponsor, invest in, or have certain relationships with private equity and hedge funds (as “covered funds”). This, combined with other post-crisis regulations like Basel III capital requirements, constrained banks’ capacity and willingness to hold leveraged loans on their balance sheets or provide high-leverage financing to riskier borrowers, particularly in the middle market and for private equity-sponsored deals.

    As such, growth in direct lending accelerated sharply following the 2008 Global Financial Crisis, as tightened bank regulation curtailed pushed lending appetite elsewhere. Alternative managers filled the void, and today the direct lending market represents nearly $2 trillion in deployed capital in the U.S. For middle-market borrowers, it offers a reliable funding partner. For investors, it delivers a yield premium over public credit — the so-called illiquidity premium — in exchange for capital lock-up (this is important).

    Private Credit Markets are Larger than Public Credit Markets

    Bar graph comparing private credit markets to other public credit markets.

    Source: LPL Research, Apollo Global Management 03/15/26
    Disclosures: Past performance is no guarantee of future results. Any companies or options referenced are being presented as a proxy, not as a recommendation.

    Business Development Companies (BDCs) offer retail investors the most accessible entry point into private credit direct lending, providing high dividend yields due to their requirement to distribute 90% of taxable income. By investing mainly in the debt — and occasionally the equity — of middle‑market companies, they give individuals exposure to private credit strategies typically reserved for institutional investors. However, BDC portfolios can be opaque, often employ leverage, and experience net asset value (NAV) volatility unrelated to loan performance. Major players such as Ares Capital (ARCC), Blue Owl Capital (OWL), and FS KKR (FSK) now anchor an industry exceeding $500 billion in assets.

    Meanwhile, private‑credit ETFs are emerging rapidly, though they face structural challenges since illiquid private loans must be housed within vehicles offering daily liquidity. As a result, most ETFs combine true private loans with syndicated or investment‑grade credit to manage redemptions and preserve liquidity. For investors, the appeal is higher yields with familiar ETF mechanics — but the exposure is only an approximation of private credit, and liquidity risks remain significant.

    Cracks in the Core: Software Lending Is Stress Testing Private Credit Markets

    Note: throughout the rest of this publication, we will refer to the direct lending segment as “Private Credit” as that has been the preference within the financial media.

    Private credit remains the area where structural risks are most deeply embedded — and least visible. Over the past five years, enterprise software has become a core theme for private credit and private equity, with direct lenders funding 40% – 70% of leveraged buyouts between 2022 and 2023, up sharply from 15–25% pre‑pandemic. Software and technology companies now represent over 20% of BDC investments, and market estimates are that between 25–35% of private‑credit portfolios carry some degree of AI‑related disruption risk.

    Technology is the Largest Sector Within BDCs

    Bar graph comparing sectors within business development companies from 2023 to 2025, highlighting technology is the largest sector.

    Source: LPL Research, Pitchbook 03/15/26
    Disclosures: Past performance is no guarantee of future results.

    Compounding this, many loans were underwritten with optimistic income growth expectations that are proving unrealistic in today’s higher‑rate, slower‑growth environment. Borrowers face margin pressure, deteriorating interest coverage, and increased use of payment-in-kind (PIK) features — where borrowers accrue, rather than pay interest — while valuations have compressed and venture funding has cooled. With roughly 15% of SaaS borrowers struggling to cover interest expenses, the sector holds hundreds of billions of dollars that may be more susceptible to default than comparable public‑market credit.

    That said, most loans are private equity-backed or sponsored. In this context, loan-to-value (LTV) ratios — which measure the loan amount relative to the enterprise value of the company — typically incorporate sizable equity cushions to protect lenders. Private credit loans often feature conservative LTVs in the range of 40–60% (frequently mid-40s to around 50–60%), meaning private equity sponsors contribute substantial equity (often 40–60% or more of the deal value). This creates a meaningful buffer that must be significantly eroded — through declines in company value, income drops, or other stresses — before the senior debt faces material impairment, enhancing risk mitigation compared to higher-leverage structures in some syndicated markets.

    Redemptions Meet Reality: The Liquidity Limits of Private Credit

    Growing unease about today’s private credit market has seemingly reached a crescendo, with comparisons to the mortgage excesses that fueled the run up to the Global Financial Crisis almost overshadowing the escalating conflict in Iran. Market commentators continue to warn that private credit’s surge, driven by nonbank firms stepping into roles once dominated by traditional lenders, echoes how subprime mortgage origination moved outside the banking system before 2008. In turn, this reduced market transparency and the overall health of financial markets. The recent bankruptcies of smaller private credit-backed portfolio companies and warnings from major market participants, most notably JPMorgan Chase CEO Jamie Dimon, have only fueled the already high levels of concern from investors.

    The recent episode was triggered by a combination of AI/software disruption fears, broader market unease, and the realization that inflows could no longer absorb outflows in a declining-rate environment where retail investors reassessed liquidity and risk. Industry-wide redemption requests spiked in late 2025 and early 2026, with several other large non-traded BDCs and interval funds capping or slowing withdrawals. Sales volumes in some of the largest retail private credit vehicles have slowed markedly. As well, similar to a modern-day bank run, news stories highlighting increased withdrawal requests caused additional withdrawal requests, which were only amplified by the opaque nature of these strategies.

    This liquidity crunch highlights a core tension: private credit may offer higher yields but holds long-dated, hard-to-sell assets. When redemptions hit critical mass, managers must either sell loans (often at a discount in stressed markets), gate (restrict) withdrawals, or restructure the vehicle — each option risking further investor outflows and reputational damage. The gating has already moderated retail inflows, sparked legal scrutiny over disclosure practices, and prompted debate about whether illiquid strategies belong in retail-accessible products.

    Should We Be Concerned About Systemic Risks?

    While it is important to acknowledge the rise in credit risks, it is equally important to separate credit risk from systemic risk. For those of us that lived through the Global Financial Crisis, we see some similarities but distinct and important differences. What we’re seeing today looks more like a healthy repricing and shift in sentiment — not the start of a broad credit unwind. Historically, systemic risk becomes a concern when corporate debt grows significantly faster than the overall economy. By that measure, we are not seeing red flags. Sub‑investment‑grade lending remains manageable relative to GDP, and even with the growth of private credit, the total share of non‑investment‑grade corporate lending is roughly where it was a decade ago. In fact, overall corporate debt‑to‑GDP levels have actually come down in recent years.

    Corporate Debt to GDP Has Fallen Recently

    Graph highlighting the corporate debt to gross domestic product ratio from 1960 to 2025, highlighting the ratio has fallen recently.

    Source: LPL Research, Bloomberg. 03/15/26
    Disclosures: The National Bureau of Economic Research (NBER) defines a recession as a significant, widespread, and sustained decline in economic activity lasting more than a few months. Past performance is no guarantee of future results.

    As it relates to redemption requests turning into forced selling — especially after a few private credit managers activated redemption gates, including industry heavyweight BlackRock that enforced its 5% redemption gate on its HPS Corporate Lending Fund — gating isn’t a signal that something is breaking; it’s the structure doing exactly what it was designed to do. These vehicles exist to invest in illiquid loans, and the guardrails are built to prevent fire‑sale conditions during periods of stress. When redemption requests rise, managers may use these gates to protect existing investors and avoid selling assets at poor prices. This mechanism helps contain stress and reduces the likelihood of broader market spillovers.

    This protective design is common across the private credit ecosystem. Private‑credit collateralized loan obligations (CLOs), for example, have structural features that automatically redirect cash flows during periods of strain, limiting the need to sell assets. Insurance companies, another key investor group, are also insulated from forced selling thanks to surrender penalties, liquidity facilities, and allocations to more liquid bonds that can be tapped first. Taken together, these structural safeguards help ensure that forced selling is unlikely to become a meaningful source of systemic risk, in our view.

    The Bottom Line

    As noted investor Warren Buffett famously said, when the tide goes out, you see who has been swimming naked. And over the past few years, liquidity has been abundant, but that liquidity is now ebbing. Private markets enjoyed a powerful tailwind during the period of ultra‑low interest rates, and it is highly likely that many deals were underwritten with overly optimistic assumptions during that stretch. That suggests there is still likely additional adjustment and potential pain ahead. However, this does not imply that the broader private‑market asset class is in jeopardy.

    The era of ultra-low interest rates (post-GFC through much of the 2010s and early 2020s) played a key role in fueling current excesses in private credit by driving a relentless “search for yield.” With traditional safe assets offering near-zero returns, institutional investors piled into higher-yielding alternatives like private credit, enabling looser underwriting, higher leverage in some deals, and rapid AUM growth. This contributed to competitive dynamics where capital chased deals, sometimes compressing spreads and accepting lower-quality borrowers — a classic late-cycle behavior. Yet this is part of the natural credit cycle: low rates inflate asset prices and encourage risk-taking, while rising rates (as seen recently) discipline the market, force selectivity, and reset valuations. Overall, while excesses built during the low-rate regime warrant caution (particularly as 2020 and 2021 vintages need to refinance into a higher interest rate environment), the asset class’s investor protections should limit spillovers into the broader economy.

    Private credit is undeniably facing real, observable risks today. However, an immediate shock and contagion from the asset class failing is not in our forecasts. Rising defaults, an increase in PIK usage, and lower interest rate coverage ratios are immediate concerns to consider. Additionally, while less than 20% of private credit capital is invested in a vehicle offering some type of liquidity, much of that is within the retail industry and directly impacts our advisors. As such, we continue to advocate for investing in managers who apply disciplined, conservative valuation methodologies, with portfolios composed of senior secured debt securities.

    Asset Allocation Insights

    LPL’s Strategic Tactical Asset Allocation Committee (STAAC) maintains its tactical neutral stance on equities. As the war in Iran continues and oil prices have moved sharply higher, investors may be well served by bracing for additional volatility. The stock market’s resilient track record during geopolitical crises is reassuring, leaving STAAC to look for opportunities to potentially add equities at lower levels rather than remove equities due to what will likely be relatively short-term market disruption.

    STAAC’s regional preferences across the U.S., developed international, and emerging markets (EM) are aligned with benchmarks. Attractive valuations in non-U.S. equities are offset by upward pressure in the U.S. dollar, although the Committee continues to watch EM closely for opportunities due to improvements in fundamentals and the technical analysis picture pre-Iran conflict.

    The Committee still maintains a slight preference for growth over value tilt and large caps over small caps. In terms of domestic sectors, communication services remains an overweight, while industrials were recently upgraded to overweight based on strong earnings momentum, technical trends, and tailwinds from fiscal spending and AI-driven investment. The Committee continues to debate other upgrade candidates, including healthcare and technology.

    Within fixed income, the STAAC holds a neutral weight in core bonds, with a slight preference for mortgage-backed securities (MBS) over investment-grade corporates. The Committee believes the risk-reward for core bond sectors (U.S. Treasury, agency MBS, investment-grade corporates) is more attractive than plus sectors. The Committee does not believe adding duration (interest rate sensitivity) at current levels is attractive and remains neutral relative to benchmarks.

    Lawrence Gillum, Chief Fixed Income Strategist, LPL Financial

    Michael McClain, AVP, Research, LPL Financial

    You may also be interested in:

    Disclosures

    This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change. ​

    References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. ​

    Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. ​

    All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. ​

    All investing involves risk, including possible loss of principal. ​

    US Treasuries may be considered “safe haven” investments but do carry some degree of risk including interest rate, credit, and market risk. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. ​

    The Standard & Poor’s 500 Index (S&P500) 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 PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio. ​

    Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability. Earnings per share is generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio. ​

    Precious metal investing involves greater fluctuation and potential for losses.

    The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.​

    The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. Indexes are unmanaged and cannot be invested in directly.

    The MSCI US Broad Market Index captures broad U.S. equity coverage. The index includes 3,204 constituents across large, mid, small and micro capitalizations, about 99% of the U.S. equity universe. Indexes are unmanaged and cannot be invested in directly.

    Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. Private credit carries certain risks — illiquidity, opacity, borrower concentration, and bespoke structures — that distinguish it from corporate bonds and bank loans and complicate its evaluation and oversight.

    All index data from FactSet or Bloomberg.

    This research material has been prepared by LPL Financial LLC.

    Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Guaranteed | Not Bank/Credit Union Deposits or Obligations | May Lose Value

    RES-006767-0226 | For Public Use | Tracking #1081775  (Exp. 03/2027)

  • Weekly Market Performance — March 20, 2026

    Weekly Market Performance — March 20, 2026

    LPL Research
    Last Updated: March 20, 2026

    LPL Research provides its Weekly Market Performance for the week of March 16, 2026. Markets navigated a choppy week marked by ongoing geopolitical tensions and shifting rate expectations amid a flurry of global central bank decisions. U.S. equities showed resilience early on but ultimately slipped as inflation concerns, elevated energy prices, and hawkish Federal Reserve takeaways weighed on sentiment. International markets faced similar headwinds, with European equities pressured by rising rates and higher crude prices, while Asian markets ended mixed amid a few different local developments. In fixed income, global front‑end yields surged as markets reassessed the path of rate cuts, while commodities remained volatile with energy prices rising and precious metals declining.

    Stock Index Performance

    Index Week-Ending One Month Year to Date
    S&P 500 -1.92% -5.86% -4.98%
    Dow Jones Industrial -2.21% -8.25% -5.27%
    Nasdaq Composite -2.17% -5.51% -6.96%
    Russell 2000 -1.95% -8.71% -2.02%
    MSCI EAFE -2.96% -10.92% -2.69%
    MSCI EM -2.10% -10.80% 1.64%

    S&P 500 Index Sectors

    Sector Week-Ending One Month Year to Date
    Materials -4.75% -11.86% 2.40%
    Utilities -4.76% -3.74% 4.15%
    Industrials -2.26% -9.32% 3.51%
    Consumer Staples -4.14% -6.59% 5.48%
    Real Estate -3.69% -6.64% 1.19%
    Health Care -3.26% -7.67% -6.68%
    Financials 0.30% -6.72% -10.89%
    Consumer Discretionary -2.78% -7.50% -10.60%
    Information Technology -1.88% -5.14% -8.47%
    Communication Services -1.91% -4.65% -4.87%
    Energy 3.34% 8.68% 32.55%

    Fixed Income and Commodities

    Indexes and Commodities Week-Ending One Month Year to Date
    Bloomberg U.S. Aggregate 0.28% -1.07% 0.12%
    Bloomberg Credit 0.58% -1.60% -0.36%
    Bloomberg Munis 0.03% -1.08% 0.76%
    Bloomberg High Yield 0.08% -1.34% -0.43%
    Oil 0.00% 48.09% 71.23%
    Natural Gas -0.61% 2.13% -15.57%
    Gold -10.49% -12.04% 4.01%
    Silver -15.75% -19.79% -5.25%

    Source: LPL Research, Bloomberg 3/20/26 @3:23 p.m. ET
    Disclosures: Indexes are unmanaged and cannot be invested in directly.

    U.S. and International Equities

    U.S. Equities: Major domestic benchmarks, although lower, continued to display some resilience over the last five days amid quite a few moving pieces originating from at home and abroad. At the forefront, inflation and economic growth jitters from still elevated energy prices kept a lid on equities, however, the S&P 500 received some support from optimism that additional tankers will pass the Strait of Hormuz after two vessels traversed the waterway last weekend with more attempts reportedly queued up. Wall Street bulls held the line to post back-to-back gains with positioning and sentiment dynamics, a rate reprieve, as well as the favorable earnings backdrop flagged for the early week upside. Nonetheless, lingering geopolitical overhangs pressured equities back below the weekly unchanged point in conjunction with Bureau of Labor Statistics data indicating producer price pressures increased more than expected last month.  Federal Reserve (Fed) rate cut expectations were also pushed out to 2027 on hawkish-leaning takeaways from Wednesday’s decision. Simultaneously, regional Iranian attacks on key energy facilities easily offset de-escalatory remarks from President Trump and Israel’s Prime Minister Benjamin Netanyahu, before the equity slide was accelerated Friday by additional U.S. military assets reportedly heading to the region.

    International Equities: Volatility in European equities remained elevated for another week of trading as the STOXX 600 dropped just over 3.75%. Crude oil posting another week of gains dragged on the oil- and natural gas-sensitive region, while central bank takeaways also dominated investor attention. Following Thursday’s European Central Bank (ECB) hold, remarks from ECB officials that a rate hike could be considered soon if price pressures continue to build was among standout headlines, while upward pressure on rates exacerbated the risk-off tone over the last two days of the week. The Swiss National Bank and Bank of England also fulfilled expectations of no change, as well as Sweden’s Riksbank.

    In Asia, geopolitical developments remained in focus in addition to a few regional developments, but major exchanges broadly ended mixed. Greater China was among laggards as tech names faced pressure from muddy artificial intelligence profit worries after Tencent curtailed buybacks and offered little insight into their agentic AI profitability strategy. Plus, the People’s Bank of China held one- and five-year loan prime rates unchanged, after rate cut bets fizzled following strong activity figures earlier in the week. Japanese shares reversed gains on Thursday after the Bank of Japan cited the geopolitical uncertainty in the Middle East when holding rates unchanged. Elsewhere, South Korea held a weekly jump from authorities’ announcement of restrictions on publicly traded firms listing certain subsidiaries to help enhance shareholder value, while unemployment hit a three-month low.

    Fixed Income, Currency, and Commodity Markets

    Fixed Income: Core bonds, measured by the Bloomberg Aggregate Index, traded lower after reversing a week-to-date gain as U.S. Treasury yields — alongside developed market bond yields — moved sharply higher to end the week, with 10‑year U.K. Gilts at 4.93%, the highest level since 2008.

    In the U.S., the Treasury yield curve has bear‑flattened aggressively this week. The 2s/10s curve sits near the flattest level since last July and down from its recent peak of 73 bps on February 5. The flattening is being driven by a front‑end selloff: the 2‑year yield has risen 42 bps since February 5, while the 10‑year is down only 12 bps. Markets have shifted from pricing in two-and-a-half Fed rate cuts for 2026 to now assigning a non‑trivial probability of rate hikes this year. Markets have also priced in the end of the global rate‑cutting cycle, with rate hike probabilities increasing across all major developed markets. Higher front‑end yields are being driven by inflation concerns linked to the conflict in Iran. U.S. two‑year and five‑year TIPS breakevens have become unanchored and continue to rise, though longer‑term inflation expectations remain well‑contained. With long‑term inflation expectations still stable — and with the bar for rate hikes still high, as reinforced by Chair Powell earlier this week — market pricing may be overly hawkish, in our view. Front‑end yields globally now appear too elevated. This move provides another opportunity for cash investors to extend excess cash out a few years (but not beyond five years) to take advantage of the backup in yields.

    Commodities and Currencies: The broader commodities complex remained volatile but ultimately ended the week moderately lower. Energy prices continued to take center stage with both West Texas Intermediate (WTI) and Brent crude gaining ground as Iran’s blockade of the Strait of Hormuz and regional attacks on major gas fields and broader facilities continued. Mixed headlines around the U.S.-Iran conflict kept trading choppy with Brent briefly trading near $120, before paring gains after President Trump stated the U.S. will look to end the conflict soon while Israeli Prime Minister stated Iranian uranium enrichment and missile manufacturing capabilities were now inoperable. However, little signs of de-escalation on Friday left prices higher and continued to widen the spread between the global benchmark Brent and North America’s WTI crude. The overall commodities complex was dented by a notable slide in gold and silver prices, while grains also declined. The dollar weakened over the last five days.

    Economic Weekly Roundup

    March FOMC Meeting: For obvious reasons, the Federal Open Market Committee (FOMC) struck the phrase “signs of stabilization” from Wednesday afternoon’s statement as they maintain a holding pattern.

    • The unemployment rate may no longer “show some signs of stabilization” but at least it’s been little changed in recent months. We expect the weakening labor market will likely be more of a risk in coming months, giving the Fed room to cut rates later this year.
    • The 2026 core inflation forecasts were revised up to 2.7% from 2.5% in the latest Summary of Economic Projections (SEP). The risk here is that disruptions within global oil supply last longer than expected. If economies must deal with elevated petroleum prices now through the summer, the economic impact will be larger than currently priced today.
    • Growth for both 2026 and 2027 were also revised higher, limiting the stagflation risks according to Fed officials.
    • The expected terminal interest rate was raised up to 3.1% from 3.0%, revealing policy makers’ concerns that inflation is getting embedded into the framework of the economy.

    The upward revision to 2026 growth is misleading if not presented in context. The weaker growth in Q4 2025 showed the economy is on feeble footing than originally estimated. The likely productivity boost from AI could not come at a better time, if it can be the antidote to slower population growth, shrinking labor force, and persistent services inflation.

    The Week Ahead

    The following economic data is slated for the week ahead:

    • Monday: Chicago Fed National Activity Index (Feb), Construction Spending (Jan)
    • Tuesday: ADP Weekly Employment Change (Mar 7), Philadelphia Fed Non-Manufacturing Activity (Mar), Nonfarm Productivity (4Q final), Unit Labor Costs (4Q final), S&P Global U.S. Manufacturing, Services, and Composite PMIs (Mar preliminary), Richmond Fed Manufacturing Index (Mar), Richmond Fed Business Conditions (Mar)
    • Wednesday: MBA Mortgage Applications (Mar 20), Import and Export Price Indexes (Feb), Current Account Balance (4Q)
    • Thursday: Initial Jobless Claims (Mar 21), Continuing Claims (Mar 14), Kansas City Fed Manufacturing Activity (Mar)
    • Friday: University of Michigan Consumer Sentiment Report (Mar final), Kansas City Fed Services Activity (Mar)

    Important Disclosures

    This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

    Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

    Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

    This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

    Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

    Asset Class Disclosures –

    International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

    Bonds are subject to market and interest rate risk if sold prior to maturity.

    Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

    Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

    Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

    Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

    High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

    Precious metal investing involves greater fluctuation and potential for losses.

    The fast price swings of commodities will result in significant volatility in an investor’s holdings.

    This research material has been prepared by LPL Financial LLC.

    Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

    For Public Use – Tracking: #1081285