Global stocks rose in March, buoyed by generally solid readouts on economic growth and corporate earnings. The S&P 500 rose 3% for the month and 10% for the quarter, marking the index’s best first quarter return since 2019. International and small cap stocks were also up around 3% for the month.¹  

S&P 500 earnings grew by 4.3% in Q4, according to FactSet, which is a notable improvement from modest earnings contraction in the first two quarters of last year. Analysts polled by FactSet expect earnings can accelerate by more than 10% for 2024, which will be important to achieve for stock prices to maintain momentum.²

Awaiting rate cuts?

Strong market results indicate that investors may have transitioned at least partially away from concern around central bank interest rate policy. Once again, good news is being treated as good, rather than just a reason to worry about inflation or high rates. The Fed is still expected to cut rates multiple times over the remainder of the year, but as the economy continues to charge ahead, the odds that cuts are further delayed increases.

Market gains

It is worth noting that since 1983, the S&P 500 has been up 10% or more seven times in the first quarter. In six of the seven, the index would continue higher for the balance of the year with the only exception driven by Black Monday in 1987.³

In another positive sign, gains in March were broad based, moving beyond the Magnificent Seven U.S. mega cap tech leaders. In fact, three of the seven were down for the month, most notably Apple and Tesla.