We’re pleased to share our Q1 2026 Quarterly Market Update in this edition of Wealth Matters for Dentists.
Another Stress Test for Markets
Investors entered 2026 hoping for steadier conditions after a period defined by trade policy uncertainty. Instead, escalating conflict in the Middle East following attacks on Iran reintroduced significant geopolitical risk. Volatility returned quickly, and markets were left weighing whether the disruption would prove temporary or something more lasting. As of the time of writing, a ceasefire is in place but negotiations over a permanent resolution remain stalled, and the Strait of Hormuz has yet to fully reopen, meaning the situation continues to evolve with direct implications for energy markets and the broader economy.
Market Drivers
The most significant impact in Q1 to the broader economy was in the energy sector and oil prices. Brent crude closed March with around a 60% price increase (measured in USD), one of the largest single-month price gains on record, as tensions in the Middle East disrupted shipping through the Strait of Hormuz.
Canadian equities held up comparatively well, with energy stocks delivering their best quarter in years and defensive sectors like consumer staples and telecom also outperforming. Growth-oriented equities were not as fortunate. Technology stocks fell as uncertainty pushed investors toward businesses generating profits today rather than those promising them further out.
Separately, fears that AI agents could displace traditional enterprise software triggered steep declines of 20% or more in some of the largest and well-known SaaS companies.
Economic Data
Inflation data for March illustrated the real-world cost of the conflict. In Canada, inflation ticked up to 2.4% in March, heavily influenced by higher gas prices. South of the border, U.S. inflation climbed to 3.3%, its highest reading since May 2024, also driven by a surge in gasoline prices. A prolonged conflict in the Middle East risks embedding these higher energy and transportation costs more deeply into the worldwide economy, which could make inflation more persistent and limit the flexibility central banks have.
Our Perspective
We are actively monitoring developments and reassessing positions where conditions have shifted. Companies with a proven ability to grow revenue, generate cash flow, and maintain strong balance sheets have consistently delivered shareholder returns through various market cycles, and that remains the standard guiding every decision we make on your behalf. Our focus stays disciplined on holding assets built to grow in value over time.
We hope you’re off to a great start this spring. Please don’t hesitate to reach out with any questions about your investment goals or how your portfolio is positioned in today’s environment.
Have Questions?
If you have questions about how these trends impact your personal financial plan, let’s discuss them.
