April 2026 Newsletter

Dear friends,

2026 is off to a unpredictable start with continued geopolitical uncertainty and volatility defining the macro environment. As always, if you have any questions or concerns please feel free to reach out.

By, Jaysen Bohrod, CFA

Market Commentary

The first quarter of 2026 will be remembered as one of the most turbulent periods in recent market history. What began as a slow rotation away from mega-cap technology stocks was overtaken by the massive geopolitical shock of Operation Epic Fury on February 28th. The Straight of Hormuz, where roughly 20% of the worlds daily supply of oil passes through was effectively closed to shipping, driving oil prices over $100 a barrel.

The quarter unfolded in two distinct phases. January and February were shaped by an ongoing away from mega-cap technology concentration. Investors were reassessing the high valuations and whether AI-driven revenue growth and capital expenditures could justify the premiums. Software stocks declined 24%, driven by AI disruption concerns of the SaaS business model. The S&P 500 was mostly flat until March’s nearly 5% decline resulting in a 4.6% decline for the quarter.

Bond Markets endured a turbulent quarter, ultimately delivering a flat return. The Bloomberg U.S. Aggregate Bond Index fell approximately .1% for the quarter but declined 1.77% in March alone. The Federal Reserve began the year with a cautious stance which led to market expectations for two or three rate cuts. After oil prices almost tripled, the market has priced in a slight chance for one cut.

Oil was the defining asset class of the first quarter of 2026. Brent crude rose to over $100 a barrel on March 8th for the first time since 2022, ultimately reaching $126 a barrel at the peak. The USO oil ETF surged 84% for the quarter and the Bloomberg commodity Index rose 24.4%, driven primarily by energy.

The dominant macro question looking forward is how long the Straight of Hormuz will remain closed and whether ceasefire negotiations can achieve a resolution. If oil prices remain elevated, the Federal reserve will face some tough questions. The Equity markets will likely remain fragmented. Energy and commodities are direct beneficiaries of supply disruption. Defensive sectors like utilities and healthcare may continue to attract investment as uncertainty rises. Technology and consumer discretionary remain under pressure from valuations and weaker sentiment. The low volatility environment at the end of 2025, driven by anticipated rate cuts, has given way to high volatility and geopolitical uncertainty.

Changes to Move Money Transactions at Charles Schwab

For better security, move money transactions requiring client approval will only be available via Schwab’s e-Authorization or DocuSign. Paper forms are no longer accepted at Schwab for ACH transfers, wires, check requests, or internal account transfers. To prevent any delays when you need to transfer money, please make sure you know your Schwab log in username & password and that your phone number is correct on your account profile (to receive a security code).

To reset your Schwab username or password, call Schwab at 1-800-515-2157.

Time to Update Your Contact Information at Schwab

Got rid of your landline?

Never added your Cell # to your Schwab account?

Go To:

https://www.schwaballiance.com

Click the ‘Profile’ tab at top right

Click ‘Contact Information’ in drop down menu

Add new information like your Cell #

Delete old information like a Home #

If you need to reset your Schwab username or password, call Schwab at 1-800-515-2157.

Stock Market Holidays/ Office Closures

April 3, 2026 – Good Friday

May 25, 2026 – Memorial Day

June 19, 2026 - Juneteenth

July 3, 2026 - Independence Day Observed

Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Pegasus Asset Management, Inc. [“Pegasus]), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from Pegasus. No amount of prior experience or success should not be construed that a certain level of results or satisfaction if Pegasus is engaged, or continues to be engaged, to provide investment advisory services. Pegasus is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of the Pegasus’ current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.pegasusassetmgt.com. Please Remember: If you are a Pegasus client, please contact Pegasus, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your Pegasus account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your Pegasus accounts; and, (3) a description of each comparative benchmark/index is available upon request.