Anyone whose New Year’s resolution was to enjoy some strong investment returns is probably pretty disappointed: The stock market just had an absolutely terrible quarter. Back in December, investors were optimistic: Strong economic growth, expected rate cuts from the Federal Reserve, and easing trade tensions painted a near-perfect backdrop for stocks. Then January hit. AI disruption fears rattled markets, dragging down software and spilling into sectors like wealth management, data, and cybersecurity. Investors rotated into defensives in the so-called “HALO trade,” fleeing to steady, cash-generating companies and taking the wind out of AI’s sails. But the real turning point came in late February, with the outbreak of the Iran war and surging oil prices, reigniting fears of stagflation. That, in turn, pushed markets to rethink the Fed’s path toward fewer cuts and tighter policy, raising borrowing costs and weighing on stocks. Keep reading on Brew Markets.—SY |