Market Recap* – Week of March 2, 2026

1. What happened in the markets?

Canadian stocks fell sharply over the week, closing notably lower on Friday. Geopolitical turmoil and commodity swings sent the TSX into another pullback as investors continued to monitor the escalating Iran conflict, which expanded further across key energy routes in the Middle East. Rising oil prices stoked inflation fears, which triggered a broad rotation out of equities as investors looked to reduce risk.

US stocks also finished the week lower across the board. The Dow slipped into negative territory for 2026 this week after the US and Israel attacked Iran last weekend, causing oil prices to top $90 per barrel. Markets had already been volatile in recent weeks as concerns about AI disrupting the labor market and corporate business models rippled across Wall Street. Adding to the pressure, a weak monthly jobs report released on Friday highlighted a key risk the market is grappling with a slowing labor market at a time when rising oil prices threaten to push inflation higher.

Canadian bonds lost ground over the week. While conflict in the Middle East would normally push investors toward the relative safety of bonds, surging oil prices created a more difficult environment. Inflation fears made bonds less attractive since the fixed payments they provide are worth less when prices are rising. The result was a decline in the value of Canadian fixed income holdings over the week, as inflation concerns proved to be the dominant force in the market.

Short-term Canadian money market instruments were essentially unchanged over the week. These instruments remained a relative safe harbor amid the broader market turbulence.

The Canadian dollar appreciated against the US dollar over the week driven by high energy prices and a cooling US labor market.

2. What does it mean for Embark Funds?

Asset class	Change	Impact on cohorts
Canadian Equities	↓	Negative for younger cohorts with higher equity exposure. Selling pressure was broad-based as inflation fears from surging oil prices triggered a rotation out of stocks.
U.S. Equities	↓	Negative for younger, growth-oriented cohorts. U.S. markets fell as a weak jobs report combined with rising oil prices raised concerns about slowing growth and persistent inflation simultaneously.
Bonds	↓	Modestly negative for older and more conservative cohorts. Unlike a typical flight-to-safety environment, inflation fears driven by the oil price surge pushed bond prices lower, leaving few places to hide.
Money Market	→	Neutral impact across all cohorts. Short-term instruments remained stable and continued to provide capital preservation, making them one of the more resilient asset classes this week.
Canadian Dollar	↑ CAD	Modestly negative for cohorts with foreign asset exposure. The stronger Canadian dollar, supported by higher energy prices and cooling US labor market, reduced the translated value of U.S. and other foreign holdings.