March in review
Geopolitical tensions escalated in March, driving higher market volatility and weighing on global bond and equity markets. In Canada, the S&P/TSX Composite Index declined 4.3%, led by sharp losses in the Materials sector (-16.3%). U.S. equities also moved lower, with the S&P 500 falling 5.0%, while Energy was the only sector to post gains. Fixed income markets were weaker as rising yields weighed on returns, driven by inflation concerns linked to elevated energy prices and geopolitical risks. Commodity performance was mixed: oil prices surged (51.6%) while gold declined (-11.5%) and natural gas was largely flat. Emerging markets underperformed, with South Korea’s KOSPI nearing bear-market territory amid higher oil prices, inflation concerns, and uncertainty around the impact of new Google technology which may disrupt memory-chip demand.
Here are some of March's most notable events:
Middle East tensions escalate, sending oil prices higher. Military tensions in the Middle East intensified after the United States and Israel launched coordinated strikes against Iran on February 28, with targeted operations continuing throughout March. U.S. officials said the actions were aimed at preventing Iran from developing a nuclear weapon and reducing regional security threats. The strikes focused on military and nuclear‑related sites, prompting Iran to respond with missile attacks on Israeli and U.S. positions. The ongoing escalation increased the risk of a broader regional conflict and added uncertainty to global energy markets. Oil prices rose sharply, weighing on oil‑importing markets, particularly in Asia and Europe, where higher energy costs amplified inflation concerns and pressured equity and bond markets.
Global oil markets tighten as supply disruptions push prices higher. Oil markets experienced significant disruption in March as geopolitical tensions affected global supply. Reduced tanker traffic through the Strait of Hormuz, a key route for global oil shipments, constrained supply and contributed to rising prices. Brent crude rose sharply over the month, finishing March above $100 per barrel and recording one of the most significant monthly increases in decades.. At the same time, attacks on energy infrastructure across the region further heightened supply risks and volatility. These developments contributed to tighter energy markets and increased uncertainty around global inflation.
| Index† | Change (%) | Index Level | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Treasury Bill (FTSE Canada 60 Day T-Bill) | 0.18 | 0.53 | 2.51 | 191.89 |
| Canadian Bonds (FTSE Canada Universe Bond) | -1.97 | 0.23 | 0.84 | 1,202.54 |
| Canadian Equities (S&P/TSX Composite) | -4.28 | 3.97 | 34.89 | 32,768.04 |
| U.S. Bonds (Bloomberg U.S. Aggregate Bond, US$) | -1.76 | -0.05 | 4.35 | 2,347.75 |
| U.S. Equities (S&P 500, US$) | -4.98 | -4.35 | 17.77 | 6,528.52 |
| Global Equities (MSCI World, US$) | -6.32 | -3.47 | 19.41 | 4,258.31 |
| Emerging Markets (MSCI Emerging Markets, US$) | -13.04 | -0.13 | 30.26 | 1,397.20 |
| Currencies† | Change (%) | Exchange Rate | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| C$/US ($) | -1.98 | -1.37 | 3.40 | 0.7186 |
| C$/Euro (€) | 0.24 | 0.27 | -3.19 | 0.6221 |
| C$/Pound (£) | -0.07 | 0.46 | 0.99 | 0.5433 |
| C$/Yen (¥) | -0.29 | -0.17 | 9.44 | 114.068 |
| Commodities (US$)† | Change (%) | Price | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Gold Spot ($/oz) | -11.52 | 6.17 | 42.28 | 4,678.60 |
| Oil WTI ($/barrel) | 51.56 | 77.86 | 53.68 | 101.38 |
| Natural Gas ($/MMBtu) | 0.10 | -10.71 | -27.77 | 2.88 |
†Total Return, as at March 31, 2026. Indices are quoted in their local currency.
Source: Bloomberg
Indices are not managed, and it is not possible to invest directly in an index.
Unemployment rises as Canadian labour market weakens. Canada’s labour market weakened in February, with employment declining by 84,000 (-0.4%) and the unemployment rate rising 0.2 percentage points to 6.7%. This followed a smaller employment decline in January of 25,000 (-0.1%), partially offsetting gains seen in late 2025. The decline was concentrated in full-time work, while part-time employment was little changed. Employment losses were recorded in both goods-producing and services-producing industries, with some of the largest declines in wholesale and retail trade and other services. On a year-over-year basis, employment was little changed in February.
Did you know?
Starting May 1, 2026, Nasdaq will implement a “fast entry” rule allowing large, newly listed companies to be added to the Nasdaq-100 index more quickly. If a company ranks among the top 40 constituents by market capitalization, it can be included after about 15 trading days, rather than waiting months or longer under existing rules. This change aims to better reflect the composition of today’s equity markets, where companies are staying private longer and entering public markets at larger sizes, allowing index composition to adjust more quickly.
Insights from our Portfolio Managers
Volatility, as it often does, arrived swiftly and without much warning…
March brought about quite the reality check for investors, as the escalating U.S.-Israel-Iran conflict rattled global markets and sent oil prices sharply higher. That said, the bigger picture remains intact. Corporate earnings in the U.S. have held up through the noise, and the fundamental case, with earnings growth, the productive deployment of AI, and a broadening of market leadership, hasn't changed. Meanwhile, at home in Canada, the S&P/TSX Composite climbed sharply in February and hit a fresh all-time high in early March, supported by surging energy prices, strong manufacturing data, and a commodities complex that tends to benefit directly from the kind of environment that weighs on other markets.
"When headlines move prices more than fundamentals justify, that's our signal to act. North American equities have been more resilient, but international and European markets were hit disproportionately hard, creating the kind of entry point that's difficult to manufacture. We've leaned into that, increasing our equity overweight in those regions. And on the bond side, unlike past energy shocks, today's inflation fears are unlikely to persist. Energy-driven price spikes tend to be temporary, and with fiscal and monetary policy far less accommodative than in the post-COVID period, the conditions for sustained inflation simply aren't the same. That's why we've extended duration in select portfolios, so if yields come down as inflation fears ease, those bonds stand to benefit. That's active management doing what it's supposed to do; turning volatility into opportunity.”
— Craig Maddock, VP & Senior Portfolio Manager, Head of Multi-Asset Management
