Q1 2026 Market Commentary: Perspective and Discipline

Would you allow me a moment of reflection before we begin?

At ThirtyNorth, our mission of Bringing Together Money and Meaning feels especially important in times like these, and it would feel incomplete not to acknowledge the broader human context in which these markets exist. Our commentary will reference events in the Middle East and the language of “risk” around prices, but always with an awareness that behind these terms are service members, families, and individuals navigating uncertainty and difficult realities. Holding both the analytical and the human is an important part of approaching this work with care. While this awareness does not change our discipline, it reinforces our commitment to thoughtful, long-term decision-making over reactive ones.

With that grounding, we turn to the quarter itself.

The past quarter has been shaped by a convergence of forces, with shifting expectations for interest rates a consistent influence. Geopolitical tensions, uneven economic data, and increased scrutiny of Generative AI valuations contributed to periods of volatility. Together, these dynamics reinforced the importance of discipline and perspective.

Resilient, Yet Uneven Economic Data

The economy continues to show resilience at the headline level, though underlying indicators suggest potential slowing. Labor markets remain firm with unemployment near historic lows, but job and wage growth have moderated. Inflation has come down meaningfully from its peak yet remains above the Federal Reserve’s target. Recent readings have come in stickier than hoped.

War in the Middle East and the Price of Energy

Geopolitical developments have reintroduced a layer of uncertainty. Conflict in the Middle East has elevated the risk of supply disruptions across energy and fertilizer markets, contributing to upward pressure on oil prices during the quarter. At the time of this writing, markets have absorbed these developments in a relatively orderly, albeit downward trajectory.

Persistently higher energy prices carry broader implications for the global economy. They can pressure consumer spending, compress corporate margins, and complicate the path forward for inflation, with effects that ripple through transportation, food, and supply chains over time. A contained conflict may result in episodic volatility, but a prolonged or widening situation could reinforce inflationary pressures and introduce additional headwinds for growth. We are closely monitoring how these dynamics evolve and, importantly, how they translate beyond headlines into the underlying drivers of markets and portfolios.

Technology and Market Leadership

Technology performance reflected a shift from enthusiasm to evaluation as markets reassessed the pace and payoff of AI investment. Hyperscalers faced pressure as capital spending expectations remained high. Broad segments of the software sector declined as investors considered how generative AI will ultimately be implemented and monetized. The opportunity remains significant, though the path forward is more nuanced than earlier optimism implied.

Shifting Interest Rate Policy Expectations

Interest rate policy remains anchored in caution, with the Federal Reserve focused on sustained progress toward lower inflation. Persistent price pressures, paired with uncertainty surrounding energy markets, have pushed back expectations for rate cuts. Policy remains data-dependent, with the potential for current rates to persist a bit longer than previously expected, as the Fed seeks greater confidence that inflation is moving sustainably lower.

As we close, we return to that balance between discipline and perspective.

In a world shaped by both measurable forces and human realities, the markets will continue to move, often in ways that resist simple explanation. Periods of uncertainty, including those influenced by geopolitical conflict, are not new to markets, nor will they be the last. Our role is not to predict each turn, but to help you move through it with clarity and confidence. That means staying grounded in a disciplined approach, aligning decisions with what matters most to you, and maintaining a steady perspective as conditions evolve.

Our commitment is to remain thoughtful, consistent, and focused on helping you navigate both the complexity and the opportunity ahead.

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