Market View: Week of Mar. 06, 2026

ECONOMIC REVIEW¹

The ISM Manufacturing Index declined to 52.4 in February but exceeded consensus expectations (51.5) for the second month in a row. (Levels above 50 signal expansion; levels below 50 signal contraction.)

• Growth broadened with 12 out of 18 major manufacturing categories reporting growth (vs. 9 in January), but the major measures of activity were mixed.

• New orders and production fell from last month’s surge but remain solidly in expansion territory at 55.8 and 53.5, respectively. Employment rose, but remains in contraction (48.8), and prices paid jumped to 70.5 from 59.0 in January.

The ISM Non-Manufacturing (Services) Index rose to 56.1, strongly beating the consensus expected 53.5.

• The February reading was the highest since July 2022 and exceeded even the most optimistic forecast of any economics group surveyed by Bloomberg.

• 14 out of 18 major service industries reported growth, the major measures of activity were mostly higher, and the new orders index, which jumped to 58.6, has now expanded in 11 of the last 12 months.

Retail sales declined 0.2% in January, though not as much as forecast (-0.3%). Sales are up 3.2% from a year ago.

• “Core” sales, which strip out the volatile categories for autos, building materials, and gas stations, and are important for estimating GDP, rose 0.2% in January and were revised higher for previous months.

Nonfarm payrolls fell 92,000 in February, well below the consensus expected gain of 55,000, and payroll gains from December and January were revised down by a total of 69,000.

• The unemployment rate ticked up to 4.4% from 4.3% in January.

How does the most recent economic data impact you?

While probably not yet indicative of a manufacturing revival, back-to-back months of growth for the ISM Manufacturing index mark a solidly positive development for an industry that has faced significant headwinds.

• The jump in the prices paid index is somewhat concerning and given the back-and-forth on tariffs as well as the rise in oil prices following the U.S. and Israel strikes on Iran, further volatility may lie ahead.

Retail sales weakened in January, but severe weather impacted much of the country and disrupted consumer activity that month. This will be a metric to watch, particularly as higher oil prices raise costs at the pump.

Although the jobs report was surprisingly weak and hit the private sector particularly hard, it should not trigger panic among investors.

• Winter storms impacted hiring, and a major nursing strike hit health care jobs, which declined by 28,000 in February, but both of these impacts should reverse next month.

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A LOOK FORWARD¹

Inflation and housing data take center stage this week with the Consumer Price Index (CPI), Personal Consumption Expenditures (PCE), existing home sales, housing starts, and building permits all releasing, along with the first revision to Q4 GDP and consumer sentiment.

How does this week’s slate of economic data impact you?

Critical readings on inflation and growth will have important implications for monetary policy this year.

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MARKET UPDATE²

Market Index Returns as of 3/6/26	WTD	QTD	YTD	1 YR	3 YR	5 YR
S&P 500	-1.99%	-1.32%	-1.32%	18.29%	20.81%	13.54%
NASDAQ	-1.22%	-3.58%	-3.58%	23.81%	25.64%	12.45%
Dow Jones Industrial Average	-2.92%	-0.86%	-0.86%	12.90%	15.21%	10.67%
Russell Mid-Cap	-3.62%	3.12%	3.12%	16.09%	13.47%	8.27%
Russell 2000 (Small Cap)	-4.03%	1.92%	1.92%	23.30%	11.94%	4.27%
MSCI EAFE (International)	-6.73%	2.68%	2.68%	21.79%	15.85%	9.36%
MSCI Emerging Markets	-6.88%	6.94%	6.94%	35.73%	17.68%	4.80%
Bloomberg US Agg Bond	-0.96%	0.77%	0.77%	5.85%	4.93%	0.38%
Bloomberg High Yield Corp.	-0.43%	0.26%	0.26%	7.02%	9.13%	4.45%
Bloomberg Global Agg	-1.75%	0.28%	0.28%	5.78%	4.27%	-1.38%

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OBSERVATIONS

• In the wake of the ongoing conflict with Iran, markets pulled back somewhat meaningfully, showing particular concern at the previously unthinkable closure of the Strait of Hormuz.

• Although U.S. large-cap indices were the least affected, the Dow Jones (-2.92%), the S&P 500 (-1.99%), and the NASDAQ (-1.22%) all moved lower on the week.

• Mid- (-3.62%) and small-cap (-4.03%) indexes both lagged, as companies further down the cap spectrum were impacted more significantly.

• International equities reversed sharply, with developed markets (MSCI EAFE) falling 6.73% and emerging markets (MSCI EM) declining 6.88%.

• Fixed income markets were negative domestically (-0.96%), internationally (-1.75%), and across the credit spectrum (-0.43).

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BY THE NUMBERS

Shrinking Labor Force, Surging Oil Prices Drive Stocks to Worst Week Since April:
A disappointing report on the U.S. labor market, a spike in oil prices and the specter of a protracted Middle East war converged at the end of a turbulent week, fueling fears of a stagflationary spiral that threatens to derail the U.S. economy. The U.S. lost 92,000 jobs in February, well below January’s gain of 126,000 and far worse than the 50,000 jobs expected by economists. The unemployment rate ticked higher, to 4.4%. The weak jobs report arrived on Friday, as the widening war in the Middle East propelled global oil prices past $90 a barrel. The Strait of Hormuz, where around a fifth of global oil supply typically flows through every day, is effectively shut. Kuwait has begun cutting production at some oil fields after running out of room to store its bottled-up crude. Both U.S. and international crude benchmarks notched their largest one-week gains on record.³

Cadillac’s Billion-Dollar Sprint to Build an F1 team from Scratch:
The Cadillac Formula 1 team was still a blank sheet of paper—without a car, a driver, or a single tire—when it made two critical hires. One was a veteran technical chief, the person responsible for designing a miracle of engineering, a rocket on wheels capable of competing at the very pinnacle of motorsports. A Ph.D. in aerodynamics wasn’t mandatory, but it helped. The other job involved a little less math: a human-resources director to onboard roughly 600 people who knew something about building superfast cars as soon as humanly possible. This, it turns out, is how you construct an F1 team from scratch.⁴