By Blair Setford, AVP, Product Management, Canada Life Investment Management Ltd.
April 16, 2026
It has been a choppy start to the year for equity markets, as investors have had to navigate several competing forces at the same time.
We did see equities stage a dramatic comeback at the end of March, with stocks climbing as oil prices fell on hopes that the U.S.-led war with Iran, which has jolted global markets and disrupted energy supplies, might be nearing a conclusion.
At the outset of the year, the leaders from 2025 — those large technology companies — faced closer scrutiny after earnings results from the fourth quarter. Their announced spending plans on artificial intelligence, taken together, weighed on their performance.
Trade policy also returned to the spotlight after a U.S. Supreme Court ruling that led the administration to introduce a broad 10% tariff on all imports.
Ultimately, both stocks and bonds declined through the quarter as investors became more concerned about higher inflation and slowing economic growth. Positions that had worked well earlier in the year were scaled back, including gold and emerging market stocks, while the U.S. dollar strengthened.
Commodity markets have been the exception. This has been driven largely by the surge in oil and gas prices after key energy infrastructure was damaged and shipping through the Strait of Hormuz was effectively halted. Crude oil posted its largest monthly gain in more than 40 years during March.
Prices for some agricultural commodities have also risen, reflecting transportation disruptions that are affecting global food supply chains.
Bond markets were volatile, as rising energy costs reignited inflation concerns. Shorter-term government bonds were particularly affected when expectations shifted quickly from interest rate cuts to the possibility of further rate increases. Although we believe central banks will be more concerned about the potential for slowing economic growth.
In this environment, diversification remains especially important, as portfolios need to be prepared for both the possibility of higher inflation and the risk of slower growth. Although bond markets have faced pressure, high-quality bonds could still play an important role in helping provide stability and support portfolio resilience.
If Middle East turmoil de-escalates in the near term, many equity sectors — including technology — have been repriced in the first quarter and may look much more attractive than they did coming into the year, which could provide portfolio growth opportunities.
As always, during periods of increased volatility like this, we encourage you to speak with your financial advisor to ensure that your portfolio still reflects your risk tolerances and that you remain on track to meet your financial goals.
In the following three-minute video, Blair Setford, AVP Product Management with Canada Life Investment Management, discusses how the first quarter has tested investors as multiple forces – from energy shocks to tariffs – has led to increased market volatility.
Markets have been volatile so far this year, shaped by several competing forces unfolding at the same time. According to Blair Setford, Assistant Vice‑President, Product Management at Canada Life Investment Management, investors have had to navigate shifting leadership in equity markets, evolving trade policy, and heightened geopolitical risk, all against a backdrop of inflation and growth uncertainty.
Equities rebounded sharply at the end of March as oil prices retreated, driven by optimism that the U.S.-led conflict with Iran—which had disrupted global energy supplies—may be moving toward resolution. Earlier in the year, however, large technology stocks that led markets in 2025 came under pressure following fourth‑quarter earnings and scrutiny around rising artificial intelligence spending. Trade policy also re‑emerged as a market concern after a U.S. Supreme Court ruling paved the way for a broad 10% tariff on imports.
Both stocks and bonds declined over the quarter as inflation concerns intensified and growth expectations softened. Investors reduced exposure to areas that had performed well earlier, including gold and emerging markets, while the U.S. dollar strengthened. Commodity markets stood out as the exception, with oil and gas prices surging after damage to energy infrastructure and disruptions to shipping through the Strait of Hormuz, pushing crude oil to its largest monthly gain in decades.
Bond markets were particularly volatile as energy-driven inflation fears shifted expectations from rate cuts to potential rate hikes, though slowing growth remains a key concern for central banks. In this environment, Blair emphasizes the importance of diversification. High‑quality bonds may still provide stability, while re‑priced equity sectors—including technology—could offer renewed opportunities if geopolitical tensions ease.
As always, investors are encouraged to review their portfolios with a financial advisor to ensure they remain aligned with long‑term goals and risk tolerance.
As AVP, Product Management at Canada Life Investment Management Ltd., Blair collaborates closely with the Portfolio Solutions Group and the Investment Management Research team. He also serves on several strategic committees, contributing to the firm’s long-term vision and product innovation. Blair joined Investment Planning Counsel (IPC) in June 2017, prior to the Canada Life acquisition, bringing nearly 30 years of experience in the Financial Services industry.
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