• Stocks rise on hopes for de-escalation in the Middle East – North American equity markets closed higher on Wednesday following reports late Tuesday that the United States presented Iran with a proposal to end the conflict, including a one-month ceasefire. The TSX gained over 1%, aided by strength in the materials sector, while the S&P 500 posted a 0.5% gain. Leadership was broad-based, with every S&P 500 sector trading higher except energy and real estate, while consumer discretionary and materials were among the top performers. Overseas, Asian markets rallied overnight, led by a gain of nearly 3% in Japan’s Nikkei, while European equities also traded more than 1% higher. Government bond yields closed lower, with the 10-year GoC yield at 3.48% and the 10-year U.S. Treasury yield at 4.32%. In commodity markets, oil prices were down roughly 1.3% amid optimism around potential de-escalation in the Middle East.
   
• De-escalation hopes lift global markets – The United States reportedly offered Iran a 15-point proposal on Tuesday evening aimed at ending the conflict, sending global equity markets higher today while pushing oil prices down to around $91 per barrel. However, headlines remain fluid, and Iran has denied that it is engaged in negotiations, contradicting reports from the U.S. administration. In our view, the clearest indication of meaningful progress toward de-escalation would be the resumption of crude oil flows through the Strait of Hormuz. Thus, volatility could persist as headlines evolve over the coming days and weeks. Nevertheless, our longer-term outlook for the economy and equities remains constructive. Yesterday offered an initial read on business activity amid the conflict, with the March S&P Global Purchasing Managers’ Index (PMI) indicating that U.S. business activity slowed relative to the prior month, but remained in expansion territory, potentially signaling near-term resilience. We continue to see attractive opportunities in U.S. equities, as well as in overseas developed-market small- and mid-cap equities and emerging-market equities.
   
• Broadening leadership a key theme of the first quarter – After three consecutive years of strong performance by U.S. technology and growth-style stocks, market leadership has broadened in the first quarter of 2026. Year-to-date, the energy sector has been the top performer of the S&P 500, rising more than 35%. Industrials, materials, utilities, and consumer staples have also posted gains of more than 5%. Meanwhile, technology, communication services, and consumer discretionary have been among the laggards, each declining more than 5%. In Canada, the energy sector of the TSX has also led the way, higher by over 25% this year, whereas technology has lagged, declining over 20%. In our view, diversification will be critical for investors over the remainder of the year. In Canada, we recommend investors consider overweighting the energy, industrials and materials sectors, offset by underweights to technology, consumer discretionary, consumer staples and communication services. In the U.S., we favour the consumer discretionary and industrials sectors, offset with underweights to utilities and consumer staples.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data: FactSet.} 

• Stocks finish mostly mixed as uncertainties persist - Markets remain on edge as the Iran conflict continues, with sentiment swinging on headlines and moves in oil. WTI crude rose nearly 4% to around $92 amid mixed signals on how long the conflict may last. Reports indicate the Pentagon is preparing to deploy roughly 3,000 troops to the Middle East, even as the U.S. administration is reportedly discussing the possibility of peace talks as early as Thursday. The TSX and U.S. small- and mid-cap stocks outperformed, ending higher on the day, while technology—particularly software—lagged amid renewed concerns about AI‑driven disruption. Bond yields climbed to multi‑month highs, with the 10‑year GoC approaching 3.60%, its highest level since July, as investors debate how central banks will respond to an energy‑driven rise in inflation. Meanwhile, gold erased its premarket gains following reports that Turkey may tap its reserves to defend the lira.
   
• Survey data offer an early read on the conflict’s economic impact - The global preliminary Purchasing Managers' Index (PMI) data for March released today provided an initial assessment of how the conflict is weighing on growth and inflation. In the U.S., the data was mixed, with manufacturing activity surprising to the upside but with services activity falling to the lowest in 11 months. In the eurozone, the flash PMIs and consumer confidence declined in March. While the drop was expected given the spike in energy prices and elevated uncertainty, the fall in consumer confidence was the sharpest since the Russian invasion of Ukraine in 2022. The conflict is both growth-negative and inflation-positive, but we think that overall economic resilience should hold, with the duration of the conflict remaining the key variable. While there is no recent precedent for the scale of this energy disruption, U.S. oil prices have reached, and in some cases exceeded, current levels several times over the past 15 years without tipping the economy into recession*. Oil prices today are trading at comparable levels to 2011-2013 and 2022, but the underlying fundamentals are stronger, in our view.
   
• BoC and Fed on hold as they perform a balancing act - Amid the current energy shock, the BoC and Fed must balance downside risks to the labour market against upside risks to inflation. Historically, central banks have tended to look through temporary spikes in oil prices. But with inflation running above target for five years, the latest surge in energy costs complicates that stance. At last week’s meeting, the BoC held rates steady as expected at 2.25% and mentioned that the economy is still in excess supply, which we think should help contain a quick spread to the prices of other goods and services. Bond markets now expect three BoC rate hikes by the end of the year, but we don't think the BoC will move to rate hikes anytime soon or raise rates so aggressively. Unless the conflict persists for months, the BoC will stay in wait-and-see mode, in our view. South of the border, the Fed also avoided major changes, maintaining one rate cut in its forecast—signaling a willingness to look through a one‑time boost to inflation. Unlike in 2022, when energy prices surged after Russia’s invasion of Ukraine, today’s labour market is no longer tight, policy is no longer highly accommodative, and fiscal stimulus is modest.

Angelo Kourkafas, CFA ;
Investment Strategy

^{Source for all data not cited: Bloomberg. 
Cited sources: * International Energy Agency}

• Stocks trade higher on signs of de-escalation in the Middle East – North American equity markets traded higher Monday, with the TSX gaining roughly 2% and the S&P 500 1.2%, after U.S. President Donald Trump announced that the United States would halt strikes on Iranian energy infrastructure for five days following productive conversations with Iran over the weekend. Market leadership was broad-based, with all 11 sectors of the S&P 500 closing higher, while growth-oriented sectors such as technology and consumer discretionary outperformed. European equity markets also rallied on the news, with the Euro Stoxx 50 Index closing up more than 1%. Bond yields traded modestly lower, with the 10-year U.S. Treasury yield declining to 4.35%, while the 10-year GoC yield finished at 3.54%. In commodity markets, oil prices declined roughly 10% to below $90 per barrel.
   
• Signs of de-escalation spark rally in equity markets – Global equity markets traded higher following signs of de-escalation in the Middle East conflict. Over the weekend, rhetoric intensified, with U.S. President Trump threatening to target Iranian energy and power infrastructure if the Strait of Hormuz was not reopened by Monday evening. Early Monday morning, however, President Trump announced that, following productive conversations with Iran, the United States would postpone any strikes for five days to allow for further negotiations. Markets responded positively to the shift in tone, with equities moving higher while crude oil prices declined. Although this change in rhetoric is an encouraging development, we think the clearest indication of meaningful de-escalation will be whether crude oil flows through the Strait of Hormuz are able to recover. Roughly 25% of the world’s seaborne oil trade passes through the strait, underscoring its importance to global energy markets. ¹ Headlines remain fluid, and market volatility could persist in the days and weeks ahead. Even so, we continue to believe that a healthy economic backdrop creates attractive opportunities across global equity markets. In particular, we see compelling opportunities in U.S. equities, as well as in developed overseas small- and mid-cap equities and emerging-market equities.
   
• March performance check-in – Global equity markets have stumbled in March as the conflict in Iran has driven crude oil prices more than 30% higher, weighing on overall risk sentiment. Through Friday’s close, the S&P 500 had fallen 5.4% for the month, while the TSX has declined by nearly 9%. International equities have underperformed, down roughly 10% over the same period. The United States has been a net exporter of energy products since 2019, which may offer some insulation from supply disruptions. By contrast, regions such as Asia and Europe remain more reliant on imported energy to meet demand. In Canada, despite being a net exporter of energy products, a sharp pullback in the materials sector has weighed on performance in March. In fixed income, Canadian investment-grade bonds are down over 2%, as rising yields have weighed on returns.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data not cited: FactSet. 
Cited sources: 1. International Energy Agency
International stocks represented by MSCI AC World ex USA Index.} 

• Stocks close lower amid geopolitical uncertainty and higher bond yields – North American equity markets closed sharply lower on Friday, weighed down by rising bond yields and persistent geopolitical uncertainty. The 10-year U.S. Treasury yield closed just below 4.4%, up from below 4.0% at the end of February, as higher oil prices have pushed inflation expectations higher and reduced expectations for Federal Reserve rate cuts. On the geopolitical front, oil prices edged higher amid continued uncertainty over the duration of the conflict, following reports that the U.S. is increasing military support in the Middle East. In terms of market leadership, energy and financials were the only S&P 500 sectors to finish higher, while interest-rate-sensitive sectors such as utilities and real estate, along with growth-oriented sectors such as technology, were among the laggards. On the economic side, domestic retail sales increased 1.1% in January, well above expectations for a 0.3% gain. Core retail sales, which exclude gasoline stations and motor vehicle and parts dealers, also rose a healthy 0.9%. Although higher oil prices could weigh on discretionary household spending in the months ahead, today’s report, together with the initial estimate for a 0.9% increase in headline retail sales for February, suggests Canadian household spending showed solid momentum early in the quarter.
   
• Earnings expectations holding steady despite uncertainty – The conflict involving Iran has contributed to recent market volatility, with the S&P 500 closing 5% below its January 27 all-time high yesterday. That said, we would remind investors that volatility and market pullbacks are a normal part of investing and that, historically, geopolitical conflicts have generally had only a short-term and limited effect on financial markets. On average, the S&P 500 experiences approximately three 5% pullbacks and one 10% pullback each calendar year.** Meanwhile, expectations for earnings growth in 2026 remain constructive. TSX earnings are expected to grow by 18% this year, while S&P 500 earnings are projected to grow by nearly 17%, supported by continued strength in the technology sector. Earnings growth is expected to be healthy overseas as well, with MSCI ACWI ex USA earnings forecast to rise by nearly 18% this year. In our view, opportunities in equity markets remain attractive, and we continue to favour U.S. equities, emerging-market equities, and developed overseas small- and mid-cap equities.
   
• Global monetary policy in focus – Monetary policy was in focus this week, as central banks in the U.S., Canada, Japan, the euro zone, and the United Kingdom all concluded their March meetings and opted to leave policy rates unchanged. Global bond markets were under pressure following a shift in tone from the Bank of England (BoE). While the BoE’s February monetary policy summary suggested a path of gradual easing, the March summary struck a more hawkish tone, removing commentary around expectations for future rate cuts and instead emphasizing the need to return inflation to its 2% target. The U.K. 2-year government bond yield rose 0.26% yesterday and has increased more than 0.7% this month. The Bank of Canada and the European Central Bank each struck a more measured tone, underscoring a wait-and-see approach, while the Bank of Japan signaled that it would likely continue raising interest rates if economic activity evolves broadly in line with its expectations. In the U.S., the Federal Reserve also released an updated set of economic projections at this week’s meeting, raising its forecasts for headline and core inflation in 2026, citing upward pressure on goods prices from tariffs and higher oil prices.* Despite the firmer inflation outlook, policymakers maintained their projection for one interest-rate cut in 2026.* In our view, the Bank of Canada is likely to remain on hold in the near-term, particularly given signs of softening labour-market conditions. In the U.S., we believe the Fed’s rate-cutting cycle remains intact but has likely been delayed, with cuts now unlikely until later in 2026 or 2027.

Brock Weimer, CFA ;
Investment Strategy

^{Source for all data not cited: FactSet. 
Source for data cited: *Federal Open Market Committee, March 2026 Summary of Economic Projections 
**FactSet, Edward Jones.} 

• Markets close lower amid energy supply concerns – The TSX and U.S. equity markets finished lower on Thursday, with pullbacks in materials and consumer discretionary stocks leading the decline. In international markets, Asia and Europe were also down. In energy markets, WTI oil pulled back from its recent high as Israel's Prime Minister commented that Israel would support U.S. efforts to reopen the Strait of Hormuz. Despite near-term volatility, we continue to see opportunities across markets and asset classes. Within equities, we favor U.S. large- and mid-cap stocks, supported by robust AI‑related capital investment and steady U.S. economic growth. We think the recent pullback in international markets could present an attractive entry point for long‑term investors. We favor overseas developed small‑ and mid‑caps and emerging‑market equities, which could benefit from relatively attractive valuations and healthy global earnings growth expected in 2026. Within fixed income, international bonds can add diversification through exposure to different economic and interest-rate cycles, while emerging-market debt may also enhance income.
   
• Jobless claims lower than expected – U.S. initial jobless claims ticked down to 205,000 this past week, below the 215,000 consensus. Continuing claims — reflecting the total number of people receiving benefits — rose modestly to 1.86 million, as expected, suggesting some workers are taking longer to find new employment. We think these trends remain consistent with a stabilizing labour market. Slower job creation alongside a moderate pace of layoffs should help keep wage gains running above inflation. However elevated oil prices could push inflation higher, at least temporarily, potentially raising the bar for real wage gains.
   
• Bond yields mixed – Bond yields were mixed, with the 10-year Government of Canada yield up to 3.44% and the 10-year U.S. Treasury yield down near 4.26%. However, the broader trend in recent weeks has been higher. Over half of that increase is attributable to rising inflation expectations, a key component of bond yields. Market-implied 10-year inflation expectations in U.S. Treasury Inflation Protected Securities (TIPS) markets have climbed about 15 basis points (0.15%) this month to 2.4%. Bond markets are also reflecting the view that higher inflation — partially influenced by rising oil prices — could delay Fed rate cuts. Markets have pushed back the implied timing for the next rate cut out to September 2027, followed by another in December*. That would represent a slower pace of easing than the Fed's latest projections released just yesterday**. We think the Fed remains positioned to continue cutting rates, though the path will likely be gradual. The steady labor backdrop should allow policymakers more time to confirm that the Fed's preferred personal consumption expenditures (PCE) inflation — currently 2.8% — is easing sustainably toward the 2% target before proceeding with additional cuts.

Brian Therien, CFA ;
Investment Strategy

^{Source for all data not cited: FactSet. Source for data cited: *CME FedWatch **U.S. Federal Reserve}