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, geopolitical concerns weighed on the market amid tensions in the Middle East.

The Standard & Poor’s 500 Index slipped 0.87 percent, while the Nasdaq Composite fell 3.38 percent. The Dow Jones Industrial Average edged higher, picking up 0.17 percent. The S&P/TSX Composite gained 7.57 percent.1,2

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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.3

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.4

But markets rebounded modestly following a Consumer Price Index (CPI) reading that showed the pace of inflation slowed in January.5

Geopolitical Tensions

As the month came to a close, stocks came under pressure amid investor concern over geopolitical 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.6

U.S. Sectors

Seven of the 11 Standard & Poor’s 500 Index sectors finished the month in the green, while four were under pressure.7

Energy (+9.54 percent) and Utilities (+10.36 percent) posted solid gains, while Industrials (+7.07 percent), Consumer Staples (+7.78 percent), Materials (+8.40 percent), and Real Estate (+5.82 percent) also had a good month. Health Care rose 3.53 percent.7

On the downside, Consumer Discretionary (-3.56 percent) and Information Technology (-3.56 percent) were under pressure. Financials (-3.76 percent) and Communication Services (-1.69 percent) also had a disappointing month.7

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.8,9

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 percent year over year.10

What Investors May Be Talking About in March

If you follow the Fed, you may know that the Fed’s Federal Open Market Committee meets eight times a year to vote on the direction of rates.11

What you may not know is that every other FOMC meeting, the Fed issues its "Summary of Economic Projections."

The summary provides a forecast for gross domestic product, unemployment, inflation, and the federal funds rate..11

The most talked-about feature of the summary is the "dot plot," which shows each policymaker’s projected path for the Fed Funds Rate. The dot plot represents one of the most important forward-looking monetary policy signals, as even small changes in projections can move stock and bond markets in either direction.

World Markets

The MSCI EAFE Index rose 4.50 percent in February.12,13

Every major developed European market advanced last month, with many underperforming the overall MSCI EAFE Index. France (+5.59 percent) and the United Kingdom (+6.72 percent) led the way among the majors. Elsewhere, Italy (+3.70 percent), Germany (+3.04 percent), and Spain (+2.68 percent) all notched solid gains.13

Markets outside of Europe also gained in February. Mexico (+5.63 percent) was one of the top performers. India was under pressure, falling 1.19 percent.13

In the Pacific Rim, Korea’s KOSPI continued to turn heads, tacking on another 19.52 percent, bringing its year-to-date gain to 48.17 percent. Japan (+10.37 percent) and Australia (+3.72 percent) had strong months, while Hong Kong (-2.76 percent) lagged.13

Indicators

Gross Domestic Product (GDP)

The U.S. economy grew 1.4 percent on an annualized basis in Q4, below the 2.5 percent growth economists expected and short of Q3’s 4.4 percent 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.14

The Canadian economy contracted at an annualized rate of 0.6 percent in Q4. Economists expected a 0.2 percent contraction. The Canadian GDP grew 1.7 percent during 2025.15

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 percent, slightly below economists’ expectations.16

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.16

Canadian employers shed a net 24,800 jobs in January, compared with December’s 10,100 net job gain. Canada’s unemployment rate fell to 6.5 percent, a 16-month low.17

Retail Sales

Consumer spending in the U.S. was flat in December (the latest available federal data), falling short of an expected 0.4 percent increase. Year over year, retail sales rose 2.4 percent, a step down from November’s 3.3 percent annualized pace.18

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 percent in January over the prior month.19

Industrial Production

In the U.S., industrial output rose 0.7 percent in January, beating expectations for a 0.4 percent rise and besting December’s downwardly revised 0.2 percent increase. Utilities (+2.1 percent) and manufacturing output (+0.6 percent) drove much of the gain, while mining’s 0.2 percent decline was a detractor from overall output over the month.20

Housing

Housing starts in the U.S. rose 6.2 percent in December over the prior month, following November’s 3.9 percent month-over-month rise (the latest available federal data). Single-family starts rose 4.1 percent in December, while multifamily starts jumped 10.1 percent. Regionally, the West (+37.4 percent) drove much of the month’s gains, while modest increases in the Northeast (+5.6 percent) and Midwest (+2.3 percent) more than balanced out the South’s 2.8 percent decline. Starts declined 0.6 percent for the full year compared with 2024.21

Sales of existing homes fell 8.4 percent 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 percent higher than a year ago. The supply of unsold homes fell to 3.7 months in January, down from the prior month.22,23

New home sales declined 1.7 percent in December over the prior month after November’s 15.5 percent jump (the latest available federal data). The median new home sales price rose 4.2 percent 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.24,25

Consumer Price Index (CPI)

Consumer prices in the U.S. rose 2.4 percent 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 percent, slower than the 0.3 percent expected. Core inflation, which excludes volatile food and energy prices, rose 2.5 percent year over year, in line with expectations.26,27

Consumer prices in Canada were unchanged in January. Year over year, inflation cooled slightly to 2.3 percent from December’s 2.4 percent annual pace.28

Durable Goods Orders

Orders of manufactured goods designed to last three years or longer fell 1.4 percent in December (the latest available federal data)—short of November’s upwardly revised 5.4 percent rise but better than the 2.0 percent drop economists expected.29

The Federal Reserve

While the Federal Open Market Committee (FOMC) did not meet in February, minutes from the January meeting were published on February 18.30

There were no big surprises in the minutes, but they did reveal that Fed officials remained divided over future interest rate decisions. Despite most members agreeing to hold rates steady at the January meeting, FOMC members disagreed on whether to prioritize tackling inflation or supporting the job market going forward.30

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