The big things you need to know: First, in tandem with the 5% decline in the S&P 500, investor and consumer sentiment have slipped in recent updates as investors have digested the possibility of a longer conflict in Iran and consumers have started to notice higher gas prices. Second, we review our macro takeaways from RBC’s Financial Institutions conference, where we detected echoes of the lingering confidence and emerging concerns that are seen in the surveys we discuss.

If you’d like to hear more, here’s another five minutes.

Takeaway #1: Sentiment Slips for Investors and Consumers, as the S&P 500 Is on the Cusp of True Pullback Territory

As of Friday’s close, the S&P 500 was down 4.96% from its January peak, on the cusp of what we’d consider to be true pullback territory (5-10%), but close to where the brief period of weakness that emerged last October/November bottomed out at (a drop of 5.1%). As the week wore on, it appeared to us that the prospect of a longer conflict emerged as a more realistic possibility. Before the war started, we viewed the angst in the US equity market as a sentiment unwind, and have been keeping a close eye on various sentiment gauges.

 Let’s start with investor sentiment, which fell last week. In contrast to the prior week when optimism rose slightly (reflecting views a few days after the Iran strikes), net bulls eased in last week’s AAII investor survey which was captured midweek. As of 3/12/26 net bulls were at -14.5% on the weekly update (a deterioration vs. the prior week’s -2.4%) and -6.5% on the four-week average (down vs. -2.8% the prior week). The four-week average is currently between average and one standard deviation below the long-term average (but just barely), a level that has, on average, been followed by a gain of 10.8% in the S&P 500 on a 12-month-forward basis. The four-week average is starting to get very close to the -1 standard deviation mark, which would take the model into a range consistent with a +15% 12-month-forward S&P 500 return should it fall below that level but stay above the -2 standard deviation mark. Overall, what we’re seeing at the moment on our AAII model is that sentiment made some important progress toward one potentially oversold threshold, but isn’t there quite yet.

 On the flip side, CEO sentiment has been improving. In a survey that was taken February 23 to March 6 (shortly after the IEEPA tariffs were struck down by SCOTUS, and both before and after the strikes on Iran began), the Business Roundtable reported that its index of CEO Economic Optimism rose for 1Q26 primarily due to improvements in expectations for capex and sales. The improvement in the Business Roundtable survey syncs up with the improvement we’ve seen in other C-suite surveys for 1Q26 from the Conference Board and Chief Executive magazine. While it’s not clear how the war in Iran impacted this survey’s results, it and the other C-suite surveys that are out for 1Q26 do at least tell us that corporate sentiment was in a good place at the start of the conflict.

Moving on to Takeaway #2: Echoes of Lingering Confidence & Hints of Emerging Concerns at last week’s RBC Financial Institutions conference

We spent 2 days at RBC’s Financial Institutions conference last week, where we heard from a number of Investment Banks, Regional Banks, Asset Managers (including those focused on Alternatives), and BDCs.

On the broader economy and the consumer, companies generally reported that both were steady and resilient. Bright spots noted included stimulus effects/tax refund and deregulation impacts, corporates on their “front foot” and optimism among businesses, and consumers that were still spending. At the same time, companies acknowledged the pressures on the lower-end consumers (with a few references to pressures in the middle), the k-shaped recovery, pulling back on big-ticket items, choppy consumer confidence, tax refunds coming in below expectations, and the unpredictable and volatile macro.

On geopolitics, a few comments that stuck out to us included that “all eyes” were on the Middle East and that the situation was a “wild card.” Several companies alluded to the questions of how long the conflict would go and how high oil would move, while others noted that their customers had gotten used to dealing with “macro uncertainty” or “noise.”

On private credit, in a standing room only panel hosted by RBC’s BDC analyst Ken Lee, companies emphasized confidence in their software loan portfolios and their belief that there is a disconnect between public perception and underlying fundamentals, among other topics. The idea of a disconnect between headlines and fundamentals was a theme we picked up on in other presentations. Several companies provided numbers that tried to put financial market concerns into context, while several others emphasized that they did not see risk of “contagion” from or a “massive correction” in private credit. The issue of transparency and opaqueness in private credit was referred to in a few presentations as well.

Zooming out, in last week’s presentations we saw echoes of both the solid state of CEO confidence in the Business Roundtable survey, along with hints of the deterioration that was seen in the investor and consumer sentiment surveys, illustrating the delicate moment that the US equity market finds itself in today.

That’s all for now. Thanks for listening. And be sure to reach out to your RBC salesperson with any questions.