Forward Focus - April 2026

The first quarter was the worst quarter for the S&P 500 since 2022. The tech-heavy drivers of the stock markets return for much of the last 4 years, commonly known as the Magnificent 7 (Alphabet [Google], Amazon, Apple, Meta, Microsoft, Nvidia, & Tesla), have all fallen this year with returns ranging from -6.5% to -23.5%. Over half of the stocks that make up the Dow Jones Industrial Average declined in the first quarter. The biggest decliners were American Express -18.2%, Microsoft -23.5%, and Salesforce.com -29.5%.
As a whole, 493 of the stocks that make up the S&P 500 index were down 1% in Q1. The Magnificent 7 stocks were collectively down 11% during that same timeframe. Given the weight of the stocks in the Mag 7, the overall S&P 500 index ended the quarter down 5%.
Gold hit an all time high of $5,294.40/oz in early March before falling 17% in just 3 weeks. Just a reminder that gold is a portfolio diversifier, and often used as a hedge against inflation but gold is NOT a safe haven! Safe havens don’t have 5% swings in a day or drop 15%+ in a matter of a few weeks. It is fine to own gold, Forward owns gold in some clients’ accounts via mutual funds, it is just a reminder for investors to know why they own an investment. After years of solid returns and few lasting pullbacks in stocks, we have seen that many retail investors misunderstand the risk they have in their investments.
There was plenty of red on the screen for the quarter, but the year has just begun and there are still plenty of reasons for optimism. Diversification being the main one. Despite declines in international stocks (developed & emerging markets), technology stocks, large cap U.S. stocks, and high yield bonds, a diversified 60/40 portfolio of stocks and bonds was still up 0.2% in the first quarter of 2026, according to JP Morgan Asset Management.
If you were to compare the first quarter of 2025 to the first quarter of 2026, you would see so many similarities. Last year markets were in the midst of the tariff tantrum and markets were trying to anticipate the future impact of tariffs on corporate earnings and the economy. Once uncertainty waned, markets posted double-digit returns for the remainder of 2025. This year, markets are in the midst of uncertainty in the Middle East. On the last day of the quarter, global markets began to rally on renewed possibility of a waning war.
If you were to take a look at the S&P 500 Index over the past six months, you would see, the market was trending sideways for months prior to the recent drop in March. After a 30% return from April to October 2025, a sideways market allows corporate earnings to better support current prices.
Source: FactSet, Data Morningstar, Yahoofinance.com, J.P. Morgan Asset Management as of March 31, 2026.