Market Insights

Monthly Market Insights: March 2026

U.S. and Canadian Markets

U.S. stocks struggled in February amid fears that artificial intelligence would disrupt a wide swath of industries, unsettling investors. Late in the month, tensions in the Middle East weighed on the market.

The Standard & Poor’s 500 Index slipped 0.87%, while the Nasdaq Composite fell 3.38%. The Dow Jones Industrial Average edged higher, picking up 0.17%. The S&P/TSX Composite gained 7.57%.

Dow 50,000

U.S. stocks bounded out of the gate, with the Dow leading a broad rise across all three major averages. The Dow led, closing above the 50,000 level for the first time. The University of Michigan February survey showed consumer sentiment rose to its highest level in six months, helping buoy investor sentiment.

AI Disruption

As the month wore on, stocks came under pressure as AI disruption fears spread across several industry groups. Traders grew concerned that AI could disrupt certain business models, prompting some to reassess valuations in affected sectors.

But markets rebounded modestly following a Consumer Price Index (CPI) reading that showed the pace of inflation slowed in January.

Geopolitical Tensions

As the month came to a close, stocks came under pressure amid investor concern over tensions in the Middle East. The AI fears returned after a new research report showed AI could potentially impact the broader economy and affect the unemployment rate.

U.S. Sectors

Seven of the 11 Standard & Poor’s 500 Index sectors finished the month in the green, while four were under pressure.

Energy (+9.54%) and Utilities (+10.36%) posted solid gains, joined by Industrials (+7.07%), Consumer Staples (+7.78%), Materials (+8.40%) and Real Estate (+5.82%), while Health Care rose 3.53%.

On the downside, Consumer Discretionary (-3.56%) and Information Technology (-3.56%) were under pressure. Financials (-3.76%) and Communication Services (-1.69%) also had a disappointing month.

Canada Recap

Canada’s S&P/TSX Composite Index had a solid month, bolstered by materials, energy and financial sectors as well as the global AI infrastructure buildout. The TSX advanced steadily over the month, hitting multiple record highs, with a fairly even distribution across all four weeks.

Canadian markets benefited from global uncertainty last month as investors sought safe-haven assets, including record-high gold and silver prices that helped make the materials sector the primary driver of returns. Fourth-quarter earnings for Canadian materials companies (more than half have reported so far) are up 130% year over year.

The Markets

Market/Index	February 2026 Change	YTD Change
S&P 500	-0.87%	0.49%
NASDAQ	-3.38%	-2.47%
Russell 1000	0.71%	6.06%
S&P/TSX Composite	7.57%	8.28%
10-Year Treasury Notes	3.96	-0.20
Fed Funds Rate	3.50-3.75	3.50-3.75

The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance doesn't guarantee future results. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid.

World Markets

The MSCI EAFE Index rose 4.50% in February. Every major developed European market advanced last month, with many underperforming the overall MSCI EAFE Index. France (+5.59%) and the United Kingdom (+6.72%) led the way among the majors. Elsewhere, Italy (+3.70%), Germany (+3.04%) and Spain (+2.68%) all notched solid gains.

Markets outside of Europe also gained in February. Mexico (+5.63%) was one of the top performers. India was under pressure, falling 1.19%.

In the Pacific Rim, Korea’s KOSPI continued to turn heads, tacking on another 19.52%, bringing its year-to-date gain to 48.17%. Japan (+10.37%) and Australia (+3.72%) had strong months, while Hong Kong (-2.76%) lagged.

World Market Recap

Emerging Markets	February 2026 Change	YTD Change
Hang Seng (China)	-2.76%	3.90%
KOSPI (Korea)	19.52%	48.17%
Nikkei (Japan)	10.37%	16.77%
Sensex (India)	-1.19%	-4.62%
EGX 30 (Egypt)	2.99%	17.65%
Bovespa (Brazil)	4.09%	17.17%
IPC All-Share (Mexico)	5.63%	11.04%
ASX 200 (Australia)	3.72%	5.56%
DAX (Germany)	3.04%	3.24%
CAC 40 (France)	5.59%	5.29%
IBEX 35 (Spain)	2.68%	6.08%
FTSE 100 (United Kingdom)	6.72%	9.86%
IT40 (Italy)	3.70%	5.04%

The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance doesn't guarantee future results. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Indicators

• Gross Domestic Product (GDP). The U.S. economy grew 1.4% on an annualized basis in Q4, below the 2.5% growth economists expected and short of Q3’s 4.4% pace—the fastest GDP growth in two years. The slowing pace of economic growth reflected a drop in spending due to the six-week government shutdown.

The Canadian GDP grew 1.7% during 2025. The Canadian economy contracted at an annualized rate of 0.6% in Q4—more than the expected 0.2% contraction.

• Employment. U.S. employers added 130,000 jobs in January, marking the strongest monthly job growth in over a year. January’s numbers more than doubled economists’ expectations of a 55,000 net job gain. January’s unemployment rate ticked down to 4.3%, slightly below economists’ expectations.

The January report also included substantial downward revisions going back two years, cutting the total net job gain for last year from 584,000 to 181,000, and for 2024 from 2 million to 1.5 million jobs added.

Reports from Canada revealed that employers shed a net 24,800 jobs in January, compared with December’s 10,100 net job gain, and the unemployment rate fell to 6.5%—a 16-month low.

• Retail Sales. Consumer spending in the U.S. was flat in December (the latest available federal data), falling short of an expected 0.4% increase. Year over year, retail sales rose 2.4%, a step down from November’s 3.3% annualized pace.

While federal data for January retail sales was still unavailable as of late February, the Chicago Fed’s Advance Retail Trade Summary estimated that retail and food services sales (excluding autos and auto parts) fell 0.1% in January over the prior month.

• Industrial Production. In the U.S., industrial output rose 0.7% in January, beating expectations for a 0.4% rise and besting December’s downwardly revised 0.2% increase. Utilities (+2.1%) and manufacturing output (+0.6%) drove much of the gain, while mining’s 0.2% decline was a detractor from overall output over the month.
• Housing. Housing starts in the U.S. rose 6.2% in December over the prior month, following November’s 3.9% month-over-month rise (the latest available federal data). Single-family starts rose 4.1% in December, while multifamily starts jumped 10.1%. Regionally, the West (+37.4%) drove much of the month’s gains, while modest increases in the Northeast (+5.6%) and Midwest (+2.3%) more than balanced out the South’s 2.8% decline. Starts declined 0.6% for the full year compared with 2024.

Sales of existing homes fell 8.4% in January from the prior month, a steeper decline than expected and the most significant monthly drop in almost 4 years. The median existing home sales price was $396,800, 0.9% higher than a year ago. The supply of unsold homes fell to 3.7 months in January, down from the prior month.

New home sales declined 1.7% in December over the prior month after November’s 15.5% jump (the latest available federal data). The median new home sales price rose 4.2% from the previous month to $414,400. There were 472,000 unsold new homes on the market in December, equal to 7.6 months of supply at the latest pace of sales.

• Consumer Price Index (CPI). Consumer prices in the U.S. rose 2.4% in January from a year earlier, their lowest pace in eight months. Falling gasoline and used-car prices helped cool the pace of inflation. Month over month, prices rose 0.2%, slower than the 0.3% expected. Core inflation, which excludes volatile food and energy prices, rose 2.5% year over year, in line with expectations.

Consumer prices in Canada were unchanged in January. Year over year, inflation cooled slightly to 2.3% from December’s 2.4% annual pace.

• Durable Goods Orders. Orders of manufactured goods designed to last three years or longer fell 1.4% in December (the latest available federal data)—short of November’s upwardly revised 5.4% rise but better than the 2.0% drop economists expected.

The Federal Reserve

While the Federal Open Market Committee (FOMC) didn’t meet in February, minutes from the January meeting were published on February 18. They held no big surprises, but they did reveal that Fed officials remained divided over future interest rate decisions. Most members agreed to hold rates steady, but disagreed on whether to prioritize tackling inflation or supporting the job market going forward.

The Federal Reserve next meets March 17–18, when it will publish its Summary of Economic Projections.

By the Numbers: Maple Syrup