HPWG March 2026 Market Update Podcast

Todd Hoffman:
Hello and welcome to the March edition of the Hoffman Private Wealth Group Podcast. I'm Todd Hoffman, Certified Portfolio Manager and CFP®, Founder and Managing Director at Hoffman Private Wealth Group at Steward Partners. Thanks for joining us.

Jenna:
Yes, “Welcome to our March update. I am Jenna Makras, I am a Wealth Advisor on the Hoffman Private Wealth Group. I hope your year is off to a good start so far. We have a Podcast full of useful information today.  We are sure you will enjoy it and find it helpful and informative!

Todd let’s get right into it. The markets have already been crazy and now over the weekend we have a new military conflict, maybe you can comment on what is happening in the Mideast.

Todd: 

Things escalated quickly this weekend with direct military strikes on Iran from both the US and Isreal.

This included the killing of Ayatollah Ali Khamenei, the Supreme Leader of IRAN along with his top generals and most of the senior security and military leaders.  Iran has a deep bench and is striking back sending missiles and suicide drones into Isreal, US bases, and their neighboring countries. So far, it has also shut down the Strait of Hormuz — a key shipping route where about 20% of the world’s oil passes through mostly to Russia and Asia.

So, this isn’t just political tension anymore — it has real life and death consequences and significant economic implications.

Jenna: How have markets reacted?

This is not the first international issue in the last year but as you would expect, Investors are nervous. According to Reuters news before the market opened today:

• It looks like Oil prices were going to jumped around 10%
• Gold and Safe-haven Currencies were rising 
• US and Global Stock Markets were down but not at catastrophic levels. Further, prices seemed to be firming up already this morning as we are starting this podcast.  

The concern isn’t just about the conflict — it’s the risk that oil and natural gas supply could be disrupted for long enough to disrupt markets.

Jenna:

Why does this matter for the economy?

Todd: 

If oil stays elevated, it can push inflation higher again. Plus, because many nations relied on Cheap Oil from IRAN, like Rusia and China, tensions are high. 

For the US it could:

• Make goods and transportation more expensive
• Slow progress on bringing inflation down
• Potentially delay interest rate cuts
• Deepen tensions between nations

So, this could impact the broader economy, not just energy markets.

Jenna: 

Can you give us some idea of what you’re looking for?

Todd: 

It comes down to how long this last.

If things calm down quickly:
→ Markets will likely stabilize and likely go significantly higher.

If disruptions continue:
→ We could see ongoing pressure from higher energy costs and more market volatility.

Since all this just escalated over the weekend, we’re going to need to have patience to see what happens over the next week, or two. History tells us not to panic, and that making panic financial decisions is generally a mistake and can negatively impact your long-term goals. My plan is to be vigilant but only make changes if absolutely necessary.  

Jenna: 

It’s been a busy start to the year — but not a smooth one. Besides the issues in the Middle east, what are you watching? 

Todd:

Under the surface, markets have been changing leadership.

The macro backdrop remains supportive. Recent data from the Bureau of Economic Analysis and Bureau of Labor Statistics continues to show:

• Economic growth is holding up
• Labor markets are stabilizing
• Inflation is gradually cooling

So, the foundation is solid.

But what’s happening in markets right now isn’t about the economy weakening — it’s about how investors are reassessing where future growth will come from.

Jenna: 

What’s driving that reassessment?

Todd: 

AI is reshaping how investors think about business models.

For the past decade, markets rewarded “asset-light” companies — especially software firms with subscription revenue.

But the AI arms race is turning out to be extremely capital-intensive.

Based on company disclosures from Alphabet, Amazon, Meta, Microsoft and Oracle, projected AI-related capital spending now exceeds $600 billion in 2026.

That’s roughly 2% of U.S. GDP.

And importantly — this no longer looks temporary.

According to FactSet, equity markets have responded to the increased expenses and reduced free cash flow by compressing forward valuation multiples in parts of the growth sector.

Jenna:
Has that changed what the Market outlook is and what may be the future winners?

Todd:
Yes — The AI lens is quickly changing from what companies AI is going to disrupt, to what companies AI is enabling a competitive advantage.

For example, some software firms are now facing real questions:

If AI can replicate part of what software can do, and do paying customers still need to pay for all the software subscriptions they needed before AI?

Meanwhile, companies tied to physical systems are benefiting.

Bloomberg sector data shows improving relative performance in areas like:

• Industrials
• Logistics
• Infrastructure

And that makes sense. AI can write code, but it can’t operate rail networks or build supply chains and Physical assets are harder to disrupt.

Jenna:
So is this the end of the AI story?

Todd:
Not at all.

In fact, AI is already delivering measurable productivity gains.

Company commentary compiled by FactSet increasingly highlights improvements such as:

• Faster production cycles
• Better inventory management
• Higher efficiency in logistics

Retailers also see higher orders assisted by AI-assisted tools.

Manufacturers are improving output with shorter lead times.

Energy firms are optimizing operations in exploration, transportation and distribution.

So, while parts of software may feel pressure, the broader economy is benefiting.

Jenna:
Outside of AI, what else is helping?

Todd:
Several supportive trends.

Recent releases from the BEA and BLS show:

• Job growth stabilizing after last year’s slowdown, and
• Inflation continuing to moderate

And fiscal policy remains supportive.

Put these positive trends together, many consensus forecasts are still pointing toward GDP growth of around 3% this year.

That’s a healthy environment.

Jenna:
How are you responding to all these changes and the recent switch in what has been working?

Todd: 

We’ve trimmed some of our past winners — even though many remain strong companies — to free up capital for what we believe are the next market leaders.

That can feel counterintuitive, especially when it may trigger capital gains taxes. But holding a position simply to avoid taxes can become a costly mistake if it prevents capital from being redeployed into better opportunities.

Taxes matter — but opportunity cost matters more.

Last year was a good example. According to JPMorgan, only two of the “Magnificent Seven” — Google and Amazon — kept pace with the S&P 500. The rest underperformed. These are still great businesses, and we continue to own most of them, but leadership changes over time.

The goal isn’t to sell good companies — it’s to avoid letting yesterday’s winners crowd out tomorrow’s winners.

Paying some tax today can be the price of maintaining flexibility and staying aligned with where growth and market leadership are going next. In many cases, the long-term return from reallocating into new opportunities can outweigh the short-term tax cost of trimming.

This is not about abandoning quality — it’s about actively managing capital to keep portfolios positioned for the next phase of growth.

4 guys walk into a bar — a market strategist, a Fed watcher, a long-term investor and a portfolio manager.

The economist says, “I know where the market is headed.”
The trader says, “I can profit from the move.”
And the long-term investor says, “Wake me up in 10 years.”

But the portfolio manager says, “Let’s make sure we’re still holding the right winners when you wake up.”

Jenna: 

Oh – Funny one, you slipped in a joke! 

Todd:

We’re staying diversified — but we are leaning into areas where:

• Earnings visibility is improving
• Valuations are reasonable
• Economic sensitivity works in our favor

This includes:

• Dividend-paying companies
• Industrials
• Cyclicals
• Small caps

We have also been adding to both Developed and Emerging International Markets. We have seen last year’s dollar devaluation continue in 2026 and assuming the Middle East situation doesn’t change this, and it shouldn’t, any weakness in the next couple of weeks could prove to be a great buying opportunity. 

Jenna:
Can we switch to what now already seems like old news, the recent supreme court ruling saying many of the tariffs put in place last year were done so without authority?

Todd:
The administration is already at work trying to mitigate damage from this ruling and has announced across-the-board 15% tariff rates, under Section 122 of the 1974 Trade Act. Further, the White House is working with trading partners to modestly adjust the deals negotiated last year using the new 15% tariff rate. While uncertainty creates short term volatility, the overall impact on the economy, inflation and corporate profits, is likely to be muted — at least for the next 150 days until this authority expires. So, this will be an area we will need to continue to monitor throughout the year.  

Jenna:
How about bonds?

Todd:
Bonds have been Quite stable.

Recent reports from the Wall Street Journal and Bloomberg show that:

• Municipal supply continues to be absorbed, and this has been supportive of prices
• Yields remain attractive for both Taxable and Municipal bonds, and
• Credit spreads are still tight

The bonds in our portfolios continue to provide attractive income compared to many alternatives, as well as they help to add diversification which helps reduce volatility.  

Jenna:
There’s been some noise in private credit recently.

Todd:
Yes — but based on public reporting from CNBC and Bloomberg, the private credit issues the press have been reporting appear to be isolated to a small number of managers and broader conditions appear to remain stable at this time. I have reached out to several credit managers we work with, and they remain bullish and feel the press has over blown these recent concerns. Having said this, I will continue to monitor that this problem does not turn into a systemic risk.

Jenna:
What is your current outlook on interest rate cuts?

Todd:
“Everyone keeps asking when rate cuts will be cut… at this point, it feels a bit like waiting for your table at a busy restaurant — you’re told it’ll be soon, but no one’s making promises.”

I still expect One ¼ % rate cut before midyear, and another ¼% cut, later in the year. Plus, in addition to these 2 rates cuts this year, I believe the incoming Fed Chair, Kevin Warst, will add other forms of quantitative easing to support economic growth and stability.  

If the events in the middle east should alter the current Goldilocks scenario, of not too hot, not too cold, this should become evident in the next few weeks: however, I have a lot of confidence the events in the Middle East are going to play out pretty quickly. 

Jenna:

Todd, what is your big takeaway?

Todd: 

“Watching the Olympics this month has been a good reminder —even gold medalists’ stumble. The key is don’t walk off the ice after one shaky landing. Markets work the same way and unfortunately, volatility is part of the routine. 

The recent volatility — and the likelihood of more in the coming weeks — is a normal part of market behavior, not a reason to panic.

According to FactSet, even in strong market years it’s typical to experience at least two corrections per year. So far, this year appears to be following that pattern, and remember the market remains only a few percentage points below its all-time highs and while market drops are never as fun as market advances, this is not our first rodeo. 

The economy is strong and we are always seeking new opportunities to fine tune portfolios to capture the next big wave of gains. 

At the Hoffman Private Wealth Group, we help High New Worth Families, Executives, Business Owners and Physicians navigate shifts with discipline and clarity. 

Jenna:

Thank you for listening to the March edition of the Hoffman Private Wealth Group Podcast. If you find this helpful, please share it with someone who may benefit from a thoughtful perspective on today’s markets.