There’s no shortage of activity so far this month as markets have experienced sharp and rapid sentiment shifts over the past week amid the ongoing war in the Middle East. Late last week, markets reacted negatively to threats of imminent attacks on Iranian energy production facilities that would escalate the conflict. To start the week, however, President Trump indicated progress in talks with Iran, pausing planned actions for five days and triggering a relief rally in equity markets. Hopes of a ceasefire or de-escalation continued to support sentiment early Wednesday as reports of a 15-point U.S. peace proposal circulated, alongside comments that Iran had been “talking sense” in negotiations. However, Iran has denied that any talks are taking place, reinforcing the fragile and reactive nature of current market sentiment.
Needless to say, these rapid day-to-day sentiment shifts have materially increased volatility and uncertainty across both equity and commodity markets. Energy prices have swung sharply, with WTI Crude up 4.79% as of Tuesday but still down 3.33% for the week, while Wednesday’s price action turned decisively negative. In metals, volatility has been equally pronounced. Gold has experienced significant swings and is down over 12% week to date. Copper has weakened, falling 0.32% Tuesday, 5.41% over the past week, and 8.93% month to date, though Wednesday’s session showed a short-term rebound alongside Gold and Silver. These sharp reversals highlight how quickly sentiment is shifting across commodity markets.
With Copper often viewed as a barometer for global economic health, its broader weakness over the past week and month continues to signal concern around growth and resource demand. At the same time, escalating tensions in the Middle East raise the risk of supply disruptions across oil, gas, fertilisers, and chemicals, introducing renewed inflationary pressure into the outlook. Market pricing for near-term U.S. inflation expectations has risen significantly since the start of the year, while expectations for Federal Reserve rate cuts have declined, with no policy easing currently priced in through the remainder of 2026.
Volatility has also carried through to equity indices. The S&P/TSX Composite rose 0.18% Tuesday but remains down 3.00% over the past week. In the U.S., the S&P 500 declined 0.37% Tuesday, with a -4.84% one-week return but still up 5.42% over the past month. At the time of writing Wednesday, both U.S. and Canadian indices are moving higher in a relief rally, though its durability remains uncertain and highly dependent on whether evolving headlines translate into tangible developments.
With these persistent day-to-day swings, it becomes increasingly important to identify underlying trends in sector rotation to better understand capital flows during periods of uncertainty. Today, we examine the SIA Market Sector Report to identify which sectors are gaining relative strength and which are deteriorating.
Market Sector Analysis – March 2026
The SIA Market Sector Report in SIA Charts, found in the Reports – Stock Sectors section, provides investors with a clear snapshot of relative strength rankings across 31 industry groups. This allows for insight into where capital is flowing and where it is exiting. In addition to current rankings, the report incorporates Weekly, Monthly, and Quarterly changes to help isolate emerging intermediate trends from short-term noise.
The current sector positioning tells a more defined rotation story. At the top of the report, the SIA Energy Equal Weight Index holds the #1 ranking, rising 5 positions over the past month and 18 over the past quarter, suggesting a sustained intermediate uptrend in energy leadership. Utilities are showing a similar pattern, currently ranked 4th, up 7 spots over the past month and 8 over the past quarter.
On the downside, Metals and Mining remain firmly in the unfavoured zone at 26th out of 31 sectors, with consistent deterioration across all timeframes including a 16-position drop over the past week, 22 over the past month, and 25 over the past quarter. Automotive also continues to weaken, currently ranked 30th, while Banking has begun to lose relative strength, now sitting in the Neutral zone at 13th after declining 6 positions over the past month and 9 over the quarter.
For income-oriented investors, this may suggest a rotation away from Financials and toward Utilities for more stable yield exposure. In light of this shift, we turn to the iShares S&P/TSX Capped Utilities Index ETF to assess the technical backdrop.
iShares S&P/TSX Capped Utilities Index ETF (XUT.TO)
The Utilities sector has traditionally been viewed as a defensive area offering stability and income. On a 2% scale Point & Figure chart, the iShares S&P/TSX Capped Utilities ETF (XUT.TO) has been in a steady uptrend since November 2023, coinciding with the end of the interest rate hiking cycle.
The ETF consolidated between December 2024 and May 2025, trading in a range between $26.00 and $28.00. This consolidation resolved to the upside in May 2025 with a breakout above $28.78, marking the resumption of a strong and uninterrupted uptrend. Notably, the advance has occurred without a 3-box reversal, reinforcing the sector’s role as a defensive allocation during periods of elevated volatility.
In addition to its defensive characteristics, the Utilities sector is supported by a longer-term structural tailwind tied to increasing power demand from data centre expansion, which continues to support the group.
Following this advance, the next key resistance level is projected at $41.11 based on a vertical count, with nearer-term resistance at $35.79. It remains to be seen whether the ETF consolidates at this level or continues higher toward its longer-term target. On the downside, support is identified at the 3-box reversal level of $32.42, followed by the prior breakout level at $28.78.
The ETF is currently exhibiting a positive Spread Triple Top pattern and carries a SMAX score of 10 out of 10, indicating strong alignment across SIA indicators and continued relative strength leadership.
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