Market Review – March 2026

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Equity (shares) and fixed income (bonds) markets fell sharply in March, following the US and Israel strikes on Iran, which began on 28 February. The effective closure of the Strait of Hormuz – a key shipping route for global oil supplies – by Iran, alongside repeated attacks on energy infrastructure throughout the region by both sides, drove energy prices significantly higher. At the same time, the US dollar strengthened as investors sought safety.

Stockmarkets fell heavily across most regions, although performance varied. While US equities declined, they outperformed other markets supported by the country’s status as a net energy exporter – meaning it produces more energy than it consumes, allowing it to sell surplus to other countries.

In contrast, European equities lagged the US, while Japan and Korea were among the weakest major markets, reflecting their reliance on imported energy. Latin American markets proved more resilient, as they were less affected by the Middle East energy shock than Europe and Asia.

Bond yields rose significantly as investors priced in higher inflation expectations and interest rate hikes following the surge in energy prices, with the biggest impact on bonds due to be repaid in the next few years (short- and medium-term bonds). Central banks in the US, UK and the eurozone kept policy interest rates on hold at their March meetings, but indicated they were ready to act, if necessary, to curb inflation.

Oil prices surged during the month, with both Brent Crude and West Texas Intermediate (the world’s two dominant oil benchmarks) rising by more than 50% in March. This marked one of the strongest monthly gains in decades for oil prices, despite the International Energy Agency coordinating an emergency release of oil reserves. Copper prices fell, weighed down by concerns about the prospects for weaker global growth, while gold performed poorly, which is unusual given its reputation as a ‘safe haven’ asset.

The US dollar strengthened against most major currencies, supported by its role as the world’s reserve currency, while the euro weakened against the UK pound.

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