Market turbulence defined the first quarter of the year as a clear divide emerged between struggling US equities and surging international markets. While domestic growth stocks faltered significantly, European and Chinese equities delivered their strongest comparative performance in decades. Real assets proved to be a bright spot with impressive gains across commodities, metals, and infrastructure. Meanwhile, economic uncertainty grows under new trade policies, despite resilient employment numbers. Though some underlying fundamentals remain positive, waning consumer confidence and rising inflation expectations present notable headwinds for investors navigating this complex landscape.

Markets continue to navigate heightened uncertainty, especially around tariff policies and their potential impact on both inflation and growth. This has triggered further volatility and a larger pullback in the U.S. equity market. As of March 13, the S&P 500 had experienced a 10% decline from its prior high on February 19, with selling pressure concentrated in growth stocks (a segment of the market we had previously pointed out as being expensive on a valuation basis). In contrast, markets outside the U.S. have had a stronger start to the year, with both developed non-U.S. and emerging market indices climbing year-to-date. At times like this, it’s important to remember that the S&P 500 has averaged annual intra-year drawdowns of 10.5% since 2000. While drawdowns never feel good, it is normal for markets to go through repricing periods when uncertainty around the economic outlook is heightened.

Questions of how and when legacy and donor intent should drive the structure and strategy for philanthropic activity has taken on fresh relevance in recent years. The philanthropic sector is increasingly called upon to fill gaps in social services, advocacy, and community resilience efforts. At the same time, a new generation of philanthropists is questioning whether foundations should exist in perpetuity or spend down their endowments, reflecting a sense of urgency to address issues such as climate change.