Q1 in review

Global equities fell in Q1 2026, with the MSCI ACWI down 3.2%, as a strong start to the year gave way to a sharp geopolitical shock. Markets rallied through January and early February on resilient growth and continued enthusiasm around AI-led investment, but signs of strain were already emerging in US technology stocks, where elevated valuations and questions around returns began to take hold.

The quarter’s decisive inflexion point came at the end of February, when escalating conflict in the Middle East triggered a surge in oil prices. Brent crude rose 94% over the quarter, delivering a stagflationary shock that forced a rapid re-pricing of inflation and interest rate expectations. March marked the most acute phase of the sell-off, as tighter financial conditions and rising macro uncertainty drove a broad-based risk-off move, with growth stocks particularly exposed.

The global shift in sentiment was also felt in South Africa, where strong early-year gains, driven by resources and improved domestic optimism, were reversed as higher oil prices, a weaker rand and rising inflation expectations weighed on markets. While Japan and the UK proved more resilient, supported by cyclical and commodity exposure, most major markets ended the quarter lower, highlighting a shift away from a liquidity-driven environment towards one increasingly shaped by geopolitics and inflation risk.

Source: Bloomberg as at 31 March, 2026