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- Market leadership broadened during the first quarter, with value stocks and cyclical sectors outperforming while growth stocks lagged despite strong earnings expectations.
- Oil prices rose last week as disruptions in the Strait of Hormuz increased supply concerns and pushed forecasts higher.
- Jobless claims ticked higher last week, but declining continuing claims signaled that layoffs remained limited and the labor market stayed relatively stable.
1. Market Leadership Broadens in First Quarter Rotation
Market leadership continued to broaden last week as first-quarter performance highlighted a shift away from the narrow concentration that defined the past several years. After three consecutive years of technology and growth stock outperformance, leadership expanded across a wider range of sectors. Energy emerged as the top performer year-to-date, rising more than 35%, while industrials, materials, utilities, and consumer staples each posted gains of more than 5%.1
At the same time, several of the prior market leaders lagged. The technology, communication services, and consumer discretionary sectors declined more than 5% during the first quarter.1 The shift was also reflected in style performance, with the Russell 1000 Value Index gaining more than 2% while the Russell 1000 Growth Index fell roughly 9% year-to-date.1
Despite the recent rotation, earnings expectations for growth companies remained strong, with forecasts calling for more than 20% earnings growth in 2026, supported largely by continued technology investment.1 Last week’s broader participation reinforced the importance of diversification, as a wider set of sectors contributed to returns and reduced reliance on a narrow group of market leaders.
2. Oil Prices Climb as Supply Risks Persist
Oil prices moved higher last week as continued disruptions in the Strait of Hormuz raised concerns about global supply.1 A temporary pause in strikes on Iranian energy infrastructure did little to ease uncertainty, with markets focused instead on potential shipping constraints and reduced oil flows. Estimates suggested that an extended disruption could offset recent strategic reserve releases and tighten supply further.
Rising uncertainty also led to higher oil price forecasts, with continued volatility expected if disruptions persist.1 While diplomatic developments reduced near-term escalation risks, supply conditions remained the primary driver of energy markets.
3. Labor Market Holds Steady as Jobless Claims Edge Higher
Initial jobless claims moved modestly higher last week, suggesting employers remain cautious but are avoiding widespread layoffs. New applications for unemployment benefits rose to 210,000 for the week ending March 21st, up slightly from 205,000 the prior week and broadly in line with expectations.2 While the increase reflects some cooling in labor demand, overall unemployment remains historically low and continues to reflect a resilient labor market.
At the same time, continuing claims declined to 1.82 million for the week ending March 14th, down from 1.85 million the previous week.2 This marked the lowest level of insured unemployment since late May 2024 and indicated that displaced workers are still finding jobs at a steady pace. Because continuing claims trail initial claims by one week, the decline offered a slightly more encouraging signal about underlying labor market conditions.
Overall, last week’s employment data indicated that hiring demand has moderated, but employers remain reluctant to reduce headcount meaningfully. Market participants also monitored whether the recent rise in oil prices could impact economic growth and eventually influence hiring trends in the months ahead.
For the period ending 3/27/26.
* Small-cap stocks are represented by the Russell 2000® Index. International stocks are represented by the MSCI EAFE. Bonds are represented by the Bloomberg US Aggregate Bond Index. Oil is represented by WTI Oil (West Texas Intermediate Oil), a benchmark for light, sweet crude oil and a primary measure for pricing oil contracts and futures in the U.S.
Sources
1 FactSet
2 Institute for Supply Management
Disclosures
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These materials are furnished for informational and illustrative purposes only, to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. Materials have been compiled from sources believed to be reliable; however, Cary Street Partners does not guarantee the accuracy or completeness of the information presented. Such information is not intended to be complete or to constitute all the information necessary to evaluate adequately the consequences of investing in any securities, financial instruments, or strategies described herein.
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We undertake no duty or obligation to publicly update or revise the information contained in these materials. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of securities, or information about the market, as indicative of future results.
A Composite PMI is a single index that tracks economic activity by combining the performance of both the manufacturing and services sectors, providing a comprehensive overview of overall business conditions.
Nothing contained herein should be considered a solicitation to purchase or sell any specific securities or investment-related services. It should not be assumed that any of the securities transactions or holdings discussed were, or will prove to be, profitable.
The Consumer Price Index (CPI) measures the monthly change in prices paid by U.S. consumers. The Bureau of Labor Statistics (BLS) calculates the CPI as a weighted average of prices for a basket of goods and services representative of aggregate U.S. consumer spending. The CPI is a measure of inflation and deflation. The CPI report uses a different survey methodology, price samples, and index weights than the producer price index (PPI).
EURO STOXX 50 represents Eurozone blue-chip companies considered as leaders in their respective sectors. It is made up of fifty of the largest and most liquid stocks. The index futures and options on the EURO STOXX 50, traded on Eurex, are among the most liquid products in Europe and the world.
The Nikkei 225, or Japan’s Nikkei Stock Average, is the leading price-weighted equity index for the Tokyo Stock Exchange (TSE), representing 225 top-tier Japanese blue-chip companies.
The Hang Seng Index (HSI) is the premier benchmark for the Hong Kong stock market. It tracks the performance of the largest and most liquid blue-chip companies listed on the Hong Kong Stock Exchange, serving as a primary indicator of the region’s economic health.
Additional Disclosures: International and Foreign Securities, Fixed Income Investments, the Consumer Price Index, the Producer Price Index.
Comparative Index Descriptions: The Standard & Poor’s (S&P) 500 Index, The Russell 2000® Index, The NASDAQ Composite Index, The MSCI EAFE Index, Dow Jones Industrial Average® (Dow Jones or DJIA), The Bloomberg Barclays US Aggregate Bond Index (US Agg Bond), The CBOE Volatility Index (VIX).
The Russell 1000® Growth Index measures the performance of the large cap growth segment of the US equity universe. It includes those Russell 1000 companies with relatively higher price-to-book ratios, higher I/B/E/S forecast medium term (2 year) growth and higher sales per share historical growth (5 years). The Russell 1000® Growth Index is constructed to provide a comprehensive and unbiased barometer for the large-cap growth segment. The index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics.
The Russell 1000®
