There was an optimistic start and a surprise ending to the first quarter. The major U.S. stock indexes had their worst quarter since 2022. They were down roughly 5% in March.

The U.S. markets overcame April’s “Liberation Day” pullback and Information Technology’s November woes as the S&P 500 returned 17.9%, 35% of which was attributable to the Mag Seven. Large cap value outperformed growth in the fourth quarter, but growth was the leader for the year.

Those who were hopeful that “Liberation Day” would provide clarity and reduce uncertainty, and with-it reduced market volatility, were disappointed. They did get details, but not clarity. And the details were not pretty. Uncertainty continues. The probability of a recession has increased.