The increased market volatility during the first quarter of 2026 was driven by an AI-induced pullback in technology stocks, the Supreme Court’s reversal of executive branch tariff powers, and the war in Iran. As a result of these headwinds, the Index declined 4.3% during the period. Performance leadership came from commodity-sensitive sectors, with the Energy and Basic Materials sectors among the strongest performers.

In this quarter’s review, Talbot Financial discusses strong earnings trends, record profit margins, and the sectors benefiting most from AI-related demand. The report also includes guidance on staying safe from cybercrime.