May 2026 Market Outlook
I wanted to share some perspective on what we’re seeing in the markets so far in 2026, particularly given everything unfolding globally.
During February and March, we saw modest pullbacks across the major indices — roughly in the 3–5% range. April however, was one of the best months we have seen in years despite the same catalysts for the market drop being present. At first glance, it feels like markets should be reacting more significantly given the geopolitical backdrop. But history tells us this type of response is actually quite typical.
Geopolitical events tend to create short-term volatility, but they are rarely the primary drivers of sustained market downturns. The more meaningful drawdowns — 1929, 2000, 2008 — were rooted in structural economic issues, not external shocks. Markets tend to look through conflict with the assumption that, eventually, resolution will come and growth will resume.
What we’re seeing today is more consistent with that pattern. Pullbacks of ~5% are common and occur regularly, even during strong market years. In fact, corrections of this size happen almost every year and often reset valuations without derailing long-term performance.
Where this environment becomes more relevant is around uncertainty — not necessarily the conflict itself, but how unpredictable policy decisions, energy markets, and broader economic implications may evolve. Markets don’t like uncertainty, and that’s what’s creating the day-to-day volatility we’re experiencing.
That said, unless this situation evolves into something that materially disrupts global economic structure — such as sustained energy shocks — history would suggest these periods tend to be temporary and often recover more quickly than expected.
Source: Capital Group - The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. It is not possible to invest directly in an index. Past performance does not guarantee future results. show less
From an investment standpoint, the most important takeaway remains unchanged: staying disciplined and continuing to invest consistently through volatility has historically been the most effective approach. These environments can feel uncomfortable in the moment, but they often create opportunity for long-term investors.
We will continue to monitor developments closely and make adjustments where appropriate, but at this stage, this remains within the range of normal market behaviour.
As always, please feel free to reach out if you’d like to discuss this in more detail.