Global Asset Allocation Team Market Update – March 2026
Investor sentiment was generally stable in February – despite a plethora of headlines that plagued the marketplace last month. Trade policy uncertainty resurfaced after the Supreme Court struck down much of President Trump’s sweeping global tariff scheme. However, the US administration responded immediately with a new 10% global tariff and is working on an order to raise it to 15%. Meanwhile, extreme optimism over artificial intelligence (AI) morphed into worries about its disruptive potential and stoked a pullback in sectors thought to be most vulnerable. Finally, geopolitical angst took hold as a dramatic escalation in the Middle East conflict unsettled financial markets at month-end.
Global equity markets (+1.2%) climbed to a fresh record high in February. Regionally, however, results were mixed as concerns over AI’s disruptive impacts fueled an ongoing rotation both within and outside the United States. Of note, the S&P 500 (-0.9%) bucked the global trend and retreated. The tech-heavy Nasdaq was down -2.3%, while the Magnificent Group of 7 stocks tumbled -7.3%. By contrast, the S&P 500 equal-weighed index rose 3.4% last month. Meanwhile, the S&P/TSX (+7.6%) led the global charge thanks to solid performance in the heavyweight gold (+23.5%) sector. Elsewhere, the MSCI EAFE (+4.5%) also advanced, while emerging market stocks (+5.4%) had another solid month and outperformed their developed market peers (+0.6%) by a wide margin.
In fixed income markets, treasury yields pushed lower even after solid growth and inflation data saw Federal Reserve officials pivot their focus to the inflation side of the dual mandate and advocate for a extended pause. Despite the hawkish-leaning developments, an erratic geopolitical and trade backdrop stoked demand for safe haven assets such as bonds. For the month, the Bloomberg US Aggregate Bond Index rose 1.6%, while the FTSE Canada Bond Universe gained 1.7%.
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