Markets entered 2026 on relatively stable footing, but the first quarter proved more uneven beneath the surface than headline index performance suggested. The S&P 500 declined modestly, marking its first negative quarter after three consecutive gains, while the Nasdaq fell more sharply. In contrast, smaller-cap stocks held up better, with the Russell 2000 finishing slightly higher and the equal-weighted S&P 500 posting a small gain, reflecting a less concentrated market environment than investors have grown accustomed to in recent years.