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- Oil prices surged above $100 last week as geopolitical tensions disrupted supply and kept markets sensitive to ongoing developments.
- Consumer spending and hiring remained stable last week, even as rising energy prices began to create new economic headwinds.
- Steady economic data and broader market leadership helped diversified portfolios navigate first-quarter volatility.
1. Oil Surge and Geopolitical Uncertainty Drive Market Volatilit
Oil prices moved sharply higher last week, with WTI crude rising above $104 per barrel for the first time since 2022.1 The increase followed ongoing disruptions in the Strait of Hormuz, which slowed tanker traffic and raised concerns about global supply. Despite the price increase, U.S. and Canadian oil rig counts declined in recent weeks, suggesting producers remain cautious about increasing drilling activity in response to what may still prove to be a temporary disruption. Energy futures continue to suggest oil prices could decline toward the mid-$70 range by year-end, reinforcing expectations that the current spike may not last.1
Markets remained highly sensitive to developments in the Iran conflict. Reports indicating the United States may consider ending military operations supported equity markets and contributed to lower bond yields. However, uncertainty persisted after reports that Iran struck an oil tanker off the coast of Dubai, further disrupting traffic through the Strait of Hormuz.
Oil prices remained just above $100 per barrel early in the week, reflecting ongoing supply concerns.1 With the timeline for reopening shipping lanes unclear, it appears that geopolitics will continue to drive market volatility.
2. Consumer and Labor Data Show Resilience Ahead of Energy Price Spike
Economic data released last week pointed to continued strength in consumer activity ahead of the recent rise in energy prices. February retail sales increased 0.6% month over month, the fastest growth since July 2025 and slightly above expectations.2 Core retail sales, which exclude more volatile categories and feed directly into GDP calculations, also rose 0.5%.2 Together, these figures suggest consumer spending remained steady heading into March, even as gasoline prices began moving higher.
Labor market data also showed signs of stability. U.S. companies added 62,000 private sector jobs last month, exceeding expectations for 40,000.3 Hiring remained concentrated in education and health services, sectors that have seen the majority of job gains over the past year.
Wage trends were mixed but generally stable. Pay growth for workers staying in their roles held at 4.5% for a third consecutive month.3 Meanwhile, pay growth for workers switching jobs rose from 6.3% to 6.6% in February, indicating continued demand for experienced workers.3
Overall, last week’s data suggests that consumer spending and hiring trends remain steady despite rising costs from higher energy prices.
3. Diversification Helped Offset Volatility in the First Quarter
Markets experienced elevated volatility last week as the first quarter ended, with most major U.S. indexes finishing the period lower.1 Early in the quarter, stocks moved within a relatively narrow range before declining as tensions in the Middle East intensified and energy prices moved higher. The S&P 500 ended the quarter down, marking its first quarterly decline after three consecutive quarters of gains.1
Performance beneath the surface was more mixed. The equal-weight S&P 500 finished the quarter in positive territory, while small- and mid-cap stocks also posted gains.1 International equities held up relatively well, with emerging-market stocks ending the quarter roughly flat.1 In our opinion, broader diversification appears to have helped mitigate some of the weaknesses observed in large-cap indexes.
Sector leadership also shifted during the quarter. Energy and materials stocks outperformed as oil prices rose, while financials and consumer discretionary sectors lagged.1 At the same time, leadership narrowed among mega-cap technology companies, and expectations for Federal Reserve rate cuts declined.1
Uncertainty remains elevated heading into the second quarter. However, we believe that relatively steady economic growth, improving earnings trends, and broader market participation may help support diversified portfolios during periods of continued volatility.
For the period ending 4/2/26.
* 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 U.S. Census Bureau
3 ADP National Employment Report
Disclosures
Cary Street Partners is the trade name used by Cary Street Partners LLC, Member FINRA/SIPC; Cary Street Partners Investment Advisory LLC and Cary Street Partners Asset Management LLC, registered investment advisers. Registration does not imply a certain level of skill or training.
Any opinions expressed here are those of the authors, and such statements or opinions do not necessarily represent the opinions of Cary Street Partners. These are statements of judgment as of a certain date and are subject to future change without notice. Future predictions are subject to certain risks and uncertainties, which could cause actual results to differ from those currently anticipated or projected.
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.
Cary Street Partners and its affiliates are broker-dealers and registered investment advisers and do not provide tax or legal advice; no one should act upon any tax or legal information contained herein without consulting a tax professional or an attorney.
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).
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). CSP2026001_14
