Catenaa, Saturday, April 04, 2026- The US stock market ended the first quarter as the quarter that saw the worst returns since 2022, as investors and investment advisors struggled to predict the outcome of the war.
An exuberant rally that turned the final trading day of the first quarter on Tuesday into the best day of the year so far was not enough to save US market indexes from closing the period with the worst quarterly returns, as the Standard & Poor’s 500 index recorded a 4.6% loss for the first three months.
The anxiety reflects a shift in how advisors are thinking about risk. For years, the standard playbook of diversifying across assets provided a reliable framework.
Now, advisors say, headwinds are leaving investors with less confidence that historical patterns will hold.
Both stocks and bonds had a poor first quarter, with yields on the 10-year Treasury jumping from as low as 4.01% early in March to highs of 4.44% in the closing days of the month. Even gold failed to live up to its traditional role as a haven, with its 13% decline in March making the month the worst recorded since October 2008.
“This is one of the toughest economic/market situations I’ve ever seen,” Lisa Kirchenbauer, an Advisor at Omega Wealth Management in Arlington, Virginia, told Reuters.
Intra-day volatility grew in the first quarter, Jim Carroll, Senior Wealth Advisor at Ballast Rock Private Wealth, told Reuters, masking the fact that overall, market declines have been quite orderly.
Matt Dmytryszyn, Chief Investment Officer at Composition Wealth, told Reuters, a registered investment advisory firm, said he worries that cumulative headwinds could reshape the psychological attitudes of high-net worth families, causing them to rein in their spending, which could take a toll on the broader economy.
The prospect of something just as unnerving but much more rare — stagflation, or the combination of high inflation and stalled economic growth, has David Haas of Cereus Financial Advisors concerned.
“I am not expecting 7% inflation, but it’s likely to be north of 4%,” Haas said. Higher oil prices and supply chain disruptions might cause a slowdown in economic growth. “Not necessarily recession, but maybe close,” he told Reuters.
Some factors find the parallel weakness in both stocks and bonds — uncomfortably reminiscent of 2022, when both asset classes ended up in the red, and investors found no haven — is another big concern.
Several advisors said the challenge is the number and scope of issues with which they must grapple.
