Reso 2026-070 2026 Q1 OPEB Trust and Pension Trust Investment Report

Home

QUARTERLY MARKET SUMMARY For the Quarter Ended March 31, 2026 Multi-Asset Class Management DOMESTIC EQUITY • Domestic equity markets, as represented by the S&P 500 Index (S&P) and the Russell 3000 Index, declined in the first quarter, returning -4.3% and -4.0%, respectively. This marked the weakest quarterly performance since 2022, as the geopolitical conflict involving Iran and continued volatility related to artificial intelligence exposure weighed on returns. Following the escalation of the conflict in late February, both indices declined -5.0% during the month of March. • Within the S&P 500, performance varied widely across sectors, with six of the 11 posting positive returns for the quarter. Energy was the strongest performing sector, returning 38.2%, as supply disruptions contributed to higher prices. Materials (9.7%) and Utilities (8.3%) also posted solid gains. Consumer Discretionary declined -9.2%, while Financials lagged all sectors, posting a return of -9.5%. • Large-cap stocks, as represented by the Russell 1000 Index, returned -4.2% during the quarter, as the “Magnificent Seven” experienced double-digit declines (-12.0%). Mid- and small-cap stocks outperformed large caps, with the Russell Midcap and Russell 2000 indices, returning 1.3% and 0.9%, respectively. Value stocks outperformed growth stocks across all capitalizations. • According to FactSet Earnings Insight as of April 2, 2026, analysts project earnings growth of 13.2% for the first quarter of 2026, up from an initial estimate of 12.8% in December. If realized, this would represent the sixth consecutive quarter of double-digit, YoY earnings growth. Revenue is also expected to grow, with YoY revenue growth currently estimated at 9.7%, the highest rate since 2022. For calendar year 2026, analysts project earnings growth of 17.4%. • At quarter end, the S&P 500’s 12-month adjusted positive forward price-to- earnings (P/E) ratio (includes only positive earnings results for consistency) stood at 21.6 — below its five-year average of 23.1 — as equity prices declined in March while earnings expectations remained elevated. The Russell 2000 Index, which represents small-cap stocks, posted an adjusted positive forward P/E ratio of 18.0, slightly above its five-year average of 17.5. Source: Bloomberg. S&P 500 Index Performance by Sector Periods Ended March 31, 2026 Source: Bloomberg. *P/E ratios are calculated based on one-year forward estimates and adjusted to include only posi- tive earnings results for consistency. P/E Ratios of Major Stock Indices* Consumer Disc. Consumer Staples Energy Financials H'lthcare Industrials Info. Tech Materials Real Estate Telecom Utilities QTD -9.19%7.68%38.25% -9.47% -4.88%4.61%-9.13%9.73% 2.76%-6.94%8.26% YTD -9.19%7.68%38.25% -9.47% -4.88%4.61%-9.13%9.73% 2.76%-6.94%8.26% 1 Year 11.72%6.31%36.32%0.58% 2.31%25.01% 29.05% 17.97%2.33%32.51% 19.71% -20% -10% 0% 10% 20% 30% 40% 50% 10 12 14 16 18 20 22 24 26 28 30 Apr-21 Apr-22 Apr-23 Apr-24 Apr-25 S&P 500 S&P 500 5-Year Average Russell 2000 Russell 2000 5-Year Average 2.4 Exhibit A Resolution No. 2026-070 Page 7