Welcome back to our monthly recap for March. For much of the country, March arrived and departed like a lamb, with unseasonably warm weather throughout the month. From a market perspective, however, March was less gentle—coming in like a bear and going out like a bear.
In this recap, we will discuss how the markets performed in March and then dive into our topic of the month: Warren Buffett's Parting Wisdom.
The Markets in March
March marked a sharp reversal from the relative stability seen earlier in the year, with broad-based declines across all major equity indices as investors moved decisively toward a risk‑off posture. U.S. markets declined in tandem, led lower by growth- and rate-sensitive areas. The Nasdaq fell –4.68%, while the S&P 500 and Russell 2000 posted similar losses of –4.98% and –5.00%, respectively. The Dow Jones declined –5.20%, underscoring that the pullback extended well beyond technology into more defensive and cyclical segments of the market.
A key contributor to March’s volatility was a sharp rise in geopolitical risk premiums, driven by escalating conflict involving Iran and renewed concerns over potential disruptions to global energy supply routes, particularly the Strait of Hormuz. Even without a sustained closure, heightened tensions in the region pushed oil prices meaningfully higher, adding inflationary pressure at a time when markets were already sensitive to interest rate and policy uncertainty. Rising energy costs weighed on corporate profit expectations and further pressured equity valuations, exacerbating the global sell‑off.
International equities, which had provided leadership earlier in the year, experienced the steepest declines amid this environment. Developed international markets (MSCI EAFE) fell –10.19%, while Emerging Markets declined –13.03%. These regions tend to be more sensitive to energy price shocks, currency volatility, and shifts in global capital flows, all of which intensified during March. Overall, the month reflected a recalibration of risk assumptions, where geopolitical uncertainty, rising oil prices, and tighter financial conditions combined to temporarily overwhelm diversification benefits and drive markets lower in unison.
US Equity Sectors
March saw a decisive shift toward defensiveness and real‑asset exposure, with Energy standing alone as the only positive‑returning sector, gaining 10.26% for the month. The rally was driven largely by rising oil prices amid escalating tensions involving Iran and renewed concerns around potential disruptions in the Strait of Hormuz. Higher crude prices supported energy producers and reinforced investor preference for sectors with direct pricing leverage during periods of geopolitical uncertainty.
Beyond Energy, sector performance skewed decisively negative, reflecting broad risk aversion and tightening financial conditions. Utilities declined –3.19% and Financials fell –3.52%, as rising rate volatility and uncertainty around funding costs weighed on sentiment. Technology lost –4.11%, while Communication Services slipped –5.79%, extending pressure on growth‑oriented and higher‑valuation areas as investors continued to de‑risk. Materials declined –6.03%, impacted by concerns around slowing global demand despite higher commodity prices.
More economically sensitive and consumer‑linked sectors experienced the sharpest declines. Real Estate fell –6.24% as higher energy costs and interest rate uncertainty pressured financing assumptions, while Consumer Discretionary dropped –6.56% amid softer confidence and spending concerns. Health Care declined –8.11%, and traditionally defensive Consumer Staples fell –8.41%, suggesting that correlations rose meaningfully during March’s sell‑off. Industrials rounded out the month as the weakest performer, down –8.45%, reflecting heightened sensitivity to global trade, energy costs, and slowing growth expectations. Overall, March highlighted a narrow, energy‑driven pocket of strength amid broad sector weakness, underscoring the market’s heightened sensitivity to geopolitical risk and inflationary pressures.
Bond Performance
March proved challenging for fixed income markets, with negative returns across most bond sectors as yields moved higher and volatility increased. Longer‑duration exposures bore the brunt of the pressure. U.S. Treasuries declined –1.74%, while the Bloomberg U.S. Aggregate Index fell –1.76%, reflecting weakness across both government and investment‑grade credit. Global bonds (ex‑USD, hedged) posted a –1.77% return, as rising global risk and renewed inflation concerns weighed on sovereign debt markets outside the U.S.
Shorter‑maturity bonds held up comparatively better but were not immune to rate pressure. The Bloomberg U.S. Government/Credit 1–3 Year Index slipped a modest –0.46%, benefiting from lower duration sensitivity amid the move higher in yields. Treasury bills remained the most stable segment, with 1–3 month T‑bills delivering a small positive return of 0.30%, continuing to provide capital preservation and liquidity during a volatile month for risk assets.
Overall, March represented a reversal from February’s bond rally, as geopolitical tensions, rising oil prices, and concerns around renewed inflation pressures pushed yields higher across the curve. Unlike February, when moderating economic data supported longer‑duration bonds, March’s environment favored short‑term exposures and defensive positioning. The month reinforced the importance of duration management and diversification within fixed income portfolios, particularly during periods when inflation and geopolitical risks reassert themselves.
Topic of the Month – Warren Buffett's Parting Wisdom: Patience
Warren Buffett’s quotes have provided clarity during confusion over the years.
But his final act speaks louder than any expression. He did nothing.
As CEO, Buffett had nearly $400 billion in cash to spend in 2025. But he found no opportunities that he considered sensible. After he stepped down on January 1, 2026, Buffett said he didn’t want to be sitting on so much cash. “At certain levels, cash is necessary, but cash is not a good asset.”
For individual investors, Buffett’s takeaway message is powerful: stick to your strategy. Don’t be impulsive and make an emotional decision. Allow your guiding factors to be your goals, time horizon, and risk tolerance.
Buffett looked, but didn’t find anything in 2025 that would support his strategy. So, he did nothing.
2026 will have its share of highs and lows. Remember, over the past 50 years, the stock market has, on average, pulled back by 3 percent 7 times a year. So, be prepared for some difficult stretches during the year. And be ready to do one of the hardest things for any investor: nothing.
Closing Comments
That wraps up our March recap. Thank you for trusting us as your partner on your financial journey. We’re here to help you stay focused, informed, and moving toward your long‑term goals—through all market environments.
Until next month.
Laurence