March Review: A fiery start to 2026

“Just like the chords in “Fake Plastic Trees”, price action at potential major inflection points can be mysterious and ambiguous.”

— Cameron Dawson, Fake Plastic Trees from NewEdge Wealth’s The Weekly Edge, published on 13th February, 2026.

US equities entered 2026 in a tug-of-war between strong breadth- driven momentum and emerging macro and political shocks. Record highs and equal‐weight outperformance signalled a shift from a narrow, AI‐led rally toward a more cyclically sensitive phase, with small- and mid-caps and value/cyclical sectors taking the lead even as earnings remained the market’s primary focus. A significant increase in global duration risk, tied to Japan’s expansive fiscal policy and elevated term premia on JGB, was compounded by a tariff dispute between the US and Europe concerning Greenland. At the end of February, the most severe disruption to the energy sector since the Russian invasion of Ukraine, this time driven by the US-Israel-led conflict with Iran, triggered periods of risk aversion and brought geopolitical risk prominently at the forefront of investors' mosaic.

A fierce rotation is broadening profit growth beyond mega‐cap technology into Industrials, Utilities, Energy, Materials and other previously out‐of‐favour areas, supported by record‐high projected S&P 500 net margins. According to the Chinese Lunar calendar, this is a Fire Horse year associated with energy, speed and rapid progress. This backdrop argues for active management, diversification and attention to policy as a primary driver of cross‐regional dispersion.

This report will analyse:

• US rotation and strategic implications of war with Iran
• S&P 500 earnings growth and estimates for Q4
• Sectoral earnings growth rates, surprise factors and netprofit margins
• Sector-specific monthly performance for US and European equities

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