Market Update from PIA | April 2026

Beware the First of April

The origins of the international tradition of celebrating “April Fool’s Day” each April 1st (like much folklore throughout time) are uncertain. The custom of pulling pranks and creating hoaxes is documented to have been taking place as early as the 14th century in Renaissance Europe, while some have related the practice to an even earlier time in Ancient Rome with connection to a festival known as “Hilaria.” Some of the history of the unique holiday is, itself, a hoax, such as an Associated Press article published in 1983 (and subsequently retracted) claiming that Roman Emperor Constantine once made a jester named “Kugel” king for a day, who declared it to be a “day of jollity,” later referred to as April Fool’s Day. That version of history was later learned to be a Boston University professor’s own cleverly crafted April Fool’s prank on the reporter.

In This Update: Investment Spotlight | Stock Market Review | Economic Review & Outlook
Chart of the Month | Closing Statements

INVESTMENT SPOTLIGHT

Give Me a Break, Break Me off a Piece of that KitKat Bar

April Fool’s pranks have made for great marketing fodder for companies over the years, such as Burger King’s Whopper-flavored toothpaste or Taco Bell taking out national newspaper ads in the 1990s claiming to have purchased the Liberty Bell to help reduce the national debt. The year 2026 seemed to be on track for another classic ruse with the great “KitKat heist.” Nestle announced on social media that 12 tons of Formula 1 racing car-themed chocolate bars (over 400,000!) were stolen in Europe. The company went on to launch a “tracking app” on their website on April 1st to help interested consumer sleuths search for the stolen loot. While originally thought to be a fantastical prank by many (including this author), Nestle is sticking to its story that the report involved a real criminal caper and is not, in fact, a hoax.

In a month when investors are digesting a 5% decline in the bellwether S&P 500 Index (something that has only happened once in the past three years) it would be understandable for one to pause over the April 1st headline to ensure its accuracy, much like the skepticism inspired by a company campaign to enlist consumers to track down stolen chocolate bars. Be that as it may, it is indeed a true story, reminding investors that equity markets are volatile and that returns, at times, can move wildly in either direction, testing the resolve of speculators covertly hiding out in the wrappers of long-term investors.

MARKET INDEX RETURNS	March 2026	YTD 2026
S&P 500 Index	-5.0%	-4.4%
Russell 2000 Index	-5.0%	0.9%
MSCI EAFE Index	-10.3%	-1.2%
Bloomberg US Agg. Bond Index	-1.8%	0.0%
FTSE 3 Mo. T-Bill Index	0.3%	0.9%

The last time the S&P 500 pulled back over 5% in a calendar month was one year ago in March 2025.

STOCK MARKET REVIEW & OUTLOOK

Financial Markets Digested a Shift in Risk Sentiment in March

With the exception of oil-related companies, risk assets pulled back across the board in the month of March. The CBOE VIX Volatility Index closed above 30 on two of the final trading days of the month, well ahead of the long-term average of 20, for the measure oftentimes referred to as the “fear gauge.” Ongoing geopolitical risks and Middle East war-related headlines kept investors on their heels. All sectors of the S&P 500 Index were squarely in the red, apart from Energy. Previously resilient international equity returns also experienced a meaningful downturn, ending the month with a more than 10% decline.

Fixed income investments also failed to provide safe haven, with declining asset values moving bond indices into the red in March. The yield on the 10-Year U.S. Treasury rose by 0.36% to 4.31%, reflecting the normal inverse relationship between price and yield. The shape of the U.S. yield curve continued to normalize as well, showing more positive slope between short to longer-maturity Treasuries.

S&P 500 SECTOR RETURNS	March 2026	YTD 2026
Communication Services	-7.3%	-6.9%
Consumer Discretionary	-5.6%	-9.2%
Consumer Staples	-7.4%	7.7%
Energy	10.4%	38.2%
Financials	-3.6%	-9.5%
Healthcare	-8.1%	-4.9%
Industrials	-8.4%	4.6%
Information Technology	-3.8%	-9.1%
Materials	-6.9%	9.7%
Utilities	-3.2%	8.3%
Real Estate	-6.1%	2.8%

ECONOMIC REVIEW & OUTLOOK

Gasoline Prices Created a Black Cloud for Consumers in March

A $1 per gallon surge in the price of gasoline in the U.S. during March was the fastest 30-day increase in over five years, driving the national average for a gallon of regular gas to $4.02, according to data from AAA. Prices at the pump jumped quickly and didn’t look back as the Iran conflict dragged on and concerns about crude oil supply heightened. $3.25 was the lowest monthly average tracked across our fifty states, with instances of prices exceeding $5.00 per gallon in a select unlucky few. The monthly average gasoline prices in California, Washington, and Hawaii have now breached the high set in June 2022 during the initial months of the Russia-Ukraine War.

CHART OF THE MONTH

National Average Gasoline Price High in Three U.S. States has Breached the Highs of 2022

Source: AAA

CLOSING STATEMENT

Looking Ahead

Rising oil and gasoline prices will continue to dominate consumer sentiment and weigh on investor risk appetite. Higher transportation costs are expected to carry through to prices at the grocery store and for online orders in the coming weeks. Consumers are far less likely to pick up that KitKat (or any other impulse snack purchase) with a fill-up, as price inflation at the pump continues to weigh on household discretionary spending.

While Federal Reserve and interest rate press coverage have been overshadowed by the Strait of Hormuz and oil price headlines (with the largest monthly increase occurring in March since the 1970s), inflation and employment remain critically important points of interest to economists and investors, with several key data releases in the coming weeks.

Overall equity valuations have improved, along with breadth across sectors and individual securities, all while the S&P 500 has posted a fifth consecutive quarter of double-digit earnings growth. When combined with a significant number of S&P 500 companies issuing positive earnings guidance (the highest in five years), it is a particularly interesting time to be an active stock investor, driven by tried-and-true fundamental research and pragmatic analysis. As Warren Buffet once famously alluded to, there is much to be discovered when the tides go out… no fooling.

Please reach out to one of your Account Officers or any member of our Executive Leadership Team to discuss topics raised in this letter or if we can assist you in any other way. As always, we welcome you to join the conversation on our social media pages, LinkedIn and Facebook.