Iran in focus / AI worries surface

The economy continues to perform well, and companies are reporting strong growth. However, stock markets have been bumpy recently, with new winners emerging and some old favorites losing steam. Watch Eric Lascelles' webcast here - Economic webcast - March 2026 - or read the key takeaways below:

• Iran conflict breaks out: U.S.-Iran tensions have pushed oil prices higher and rattled markets. Historically, these shocks fade quickly. Among the big questions: how far does the conflict escalate, and what happens to oil and global growth?
• Stock market rotation underway: For years, big technology companies drove market gains. That is changing. This shift means the market is finding new sources of growth, though it raises questions about how much tech companies are really worth.
• Strong earnings keep markets hopeful: Companies are expected to grow their profits by over 10 percent in the coming year - that is unusually strong. This points to a positive outlook for markets – even though stocks are more expensive than they have been historically.
• AI concerns emerge, but the long-term outlook remains positive: AI investment boosts productivity and earnings but raises concerns about job losses and software company disruption. Markets are weighing multiple outcomes—from modest gains to major economic shifts that may affect companies, workers and investors differently. Despite fears, AI investment is still expected to boost economic growth and help companies become more productive in the years ahead.
• Oil prices up, creating mixed effects: Oil has risen about $15 per barrel since early this year. This has different impacts depending on where you live. Countries that produce and sell oil (like Canada) benefit from higher prices, while countries that buy a lot of oil see their economies slightly hurt. Overall, the global economy faces a small headwind from higher energy costs.

Bottom line: The economy remains on solid ground. While stock prices are higher than historical averages and markets have been choppy, strong company earnings provide a foundation for continued growth. Investors should expect more ups and downs as market leadership shifts away from big tech toward other sectors.