Q1 2026 Market Update: Record Highs, a War, and Oil Prices That Needed a Seatbelt

Quarterly Market Intelligence Summary

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If Q1 2026 were a movie, it would open with champagne toasts and end with someone pulling the fire alarm. Here's your quarterly recap: the highlights, the lowlights, and what's ahead.

THE QUARTER IN THREE ACTS

Act I: January brought confetti. The S&P 500 hit an all-time closing high of 6,978.60 on January 27. Small caps stole the show, with the Russell 2000 surging over 6%. Kevin Warsh was nominated as the next Fed Chair. Markets were feeling themselves.

Act II: February brought reality. The Nasdaq posted its worst month since March 2025, falling over 3% as investors rotated out of AI and software names. Hot inflation data landed on February 27. Then, on the final weekend of the month, U.S. and Israeli forces struck Iran: and everything changed.

Act III: March brought the bill. Iran closed the Strait of Hormuz, choking off roughly 20% of global oil supply. WTI crude rocketed to $117.63. The S&P 500 dropped 5.1% for the month: its worst since early 2025. All five major U.S. equity indexes closed the quarter in the red.

BY THE NUMBERS

• S&P 500: 6,528.52 (down 4.63% for Q1)
• Dow Jones: 46,341.51 (down 3.58%)
• Nasdaq: 21,590.63 (down 7.10%)
• Gold: $4,679/oz (up 7.8%: the quarter's MVP)
• WTI Crude: ~$100/bbl (up 74.2%: not the kind of rally anyone wanted)
• Bitcoin: ~$63,500 (down 27.5%: so much for "digital gold")
• Fed Funds Rate: 3.50-3.75% (unchanged: the Fed watched from the sidelines)
• CPI (January): 2.4% YoY (the calm before the energy storm)

THE SILVER LINING

A fragile two-week ceasefire announced April 7 sparked the best week for stocks since November. Oil plunged 16% in a single session. Peace talks in Islamabad are underway. The mood has shifted: but the outcome remains uncertain.

WHAT WE'RE WATCHING IN Q2

• Whether the ceasefire holds (it expires April 21)
• Q1 earnings season: Goldman Sachs, TSMC, and Netflix report mid-April
• The April 28-29 FOMC meeting: the Fed's first chance to respond to the oil shock
• March Retail Sales: the first real read on how consumers handled $4+ gas
• Consumer Sentiment at a record low of 47.6: a number that deserves a hug

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