Carlson Quarterly – Q1 2026

U.S. stocks faced a turbulent start to 2026, with the S&P 500 finishing the first quarter down -4.63% and retracing a significant portion of last year’s gains. The “January Optimism” that pushed the index toward the 7,000 level was abruptly met by a March characterized by geopolitical shocks and a tightening of the private credit markets. The market saw a definitive shift from the “broad participation” of late 2025 back into defensive posturing. While technology and AI infrastructure remained in focus, the quarter was defined by a flight from risk due to escalating Middle East tensions and a spike in the 10-year Treasury yield back toward 4.30% and Private Credit concerns.

Commodities were the undisputed leaders of Q1. Brent crude was the standout, surging from $61 in early January to finishing the quarter at $107, driven by the closure of the Strait of Hormuz. Gold continued its historic run as the premier safe-haven, climbing from $4,319/oz at the start of the year to reach $4,750/oz by late March, posting a quarterly gain of +6.17%. Conversely, Bitcoin struggled to maintain its “digital gold” status during the height of the crisis, experiencing a volatile retreat from its January highs of $98,000 to its February lows near $60,000, and ending the quarter down -22.48%.

Bonds shifted back into a source of volatility as the “higher-for-longer” narrative resurfaced. The 10-year Treasury yield, which began the year at 4.16%, ended the quarter at 4.31%, pressuring total returns for the Bloomberg U.S. Aggregate Bond Index. While investment-grade spreads remained relatively stable, the Private Credit market showed notable signs of stress, with several major funds implementing redemption caps.

As we move into the second quarter of 2026, the focus is shifting from the promise of AI productivity to the reality of a higher-cost energy environment. With the U.S. election cycle moving into the foreground, political headlines will likely become a dominant theme alongside these macro-pressures. We remain focused on identifying the resilient pockets of the economy that can navigate this more fragmented global landscape.

Explore our 1^st quarter 2026 articles and learn about keeping your financial plan on track, alternative paths to building wealth, asset dispersion and market cycles, how to reduce your risk of identity theft, asset location, and the tax advantages of municipal bonds.

• Keeping Your Financial Team Aligned and Your Plan on Track– When life evolves, so should your financial plan. Read why we at Carlson describe ourselves as your financial quarterback-the person responsible for seeing the full field, anticipating the plays ahead and ensuring your financial team is aligned.

• Beyond the 401(k): Alternative Paths to Building Wealth – Lasting wealth comes from using strategies beyond the 401(k) to meet the needs of every stage of life. Learn about ways to add tax flexibility, diversification and adaptability to your strategy.

• Asset Dispersion and Market Cycles: A Guide to Navigating Change – Every so often, it’s worth pausing to look back at how the U.S. equity market has evolved. Our article reviews market shifts over the last three decades and what regime change means for investors.

• Identity Theft: What It Looks Like and How to Reduce Your Risk – Identity theft has become one of the fastest-growing financial threats facing consumers today. We share a few proactive habits that can significantly reduce your exposure in our article.

• Asset Location: A Smarter Way to Think About After-Tax Returns – When investors talk about building a portfolio, the conversation usually starts with asset allocation. What often gets overlooked is where those investments live. Find out why that decision matters more than you realize.

• A Primer on Municipal Bonds: Stable Income With Meaningful Tax Advantages – Municipal bonds are often one of the quieter corners of the investment landscape. See how they can play an important role in building a portfolio for long-term wealth.

Carlson Investments does not provide tax, legal, or accounting advice. This content has been written for informational purposes only. Always consult your individual tax, legal, or financial professionals for advice tailored to your situation.