Summary

• The Iran conflict and disruptions to the Strait of Hormuz sharply constrained global oil supply, driving a surge in energy prices even as headline Consumer Price Index appeared stable.
• The PGIM Jennison Financial Services Fund Z returned -9.51% for the quarter, modestly underperforming the -8.89% return of the S&P Composite 1500 Financials index.
• Marex Group shares rose on solid fourth quarter results with better-than-expected earnings per share driven by a strong revenue beat across the board with particular strength in market making.
• Market participants shifted away from technology and moving toward value-oriented cyclical sectors like energy, basic materials, and industrials, driven by a strong economy and resilient consumer spending.
• Software stocks experienced a notable decline as investors worried that autonomous AI agents will decimate “seat-based” pricing models-as one AI agent can replace many people.

Market Review

U.S. equity markets were dominated by geopolitical escalation and energy driven inflation risk, leading to weak quarterly performance. The Iran conflict, and resulting disruptions to the Strait of Hormuz, sharply constrained global oil supply, driving a surge in energy