Here’s What Worked During a Rough Quarter for Markets

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In a period marked by Middle East conflict and surging oil prices, it may come as no surprise that energy stocks were among the biggest winners in a largely forgettable first quarter.

But America’s oil-and-gas giants, such as Exxon Mobil and ConocoPhillips, weren’t the only early 2026 successes. Farming and defense stocks also had a strong start. So did the U.S. dollar.

The quarter began with one jolt to the oil market—the capture of Venezuelan leader Nicolás Maduro—only to end with one far larger: a weekslong conflict with Iran that shut down a key global maritime chokepoint. In between, a pivotal Supreme Court ruling against President Trump’s tariffs, and a broadening fear over artificial intelligence’s disruption to key sectors, left few corners of the market untouched.

The S&P 500 index fell 4.6% during the first three months of 2026, the benchmark’s worst quarter since 2022.

Here are some of the stocks and investments that rose above the turmoil to outperform the broader market at the start of the year:

The energy sector is on the rise after lagging behind the S&P 500’s strong performance over the past three years. It is now the standout sector of the index, rising 34% in the first quarter—its best quarterly performance in four years.

The Venezuela opportunity appeared lucrative for oil giants in the sector like Chevron and oil-field-services companies like Halliburton, which reported strong interest in drilling in the South American country after the U.S. raid to capture Maduro and Trump’s push to reap the benefits of a revival in the country’s crude production.

In the wake of the war with Iran, the energy sector has since proven an even stronger haven for investors. Traders have looked positively at energy companies amid a major shock to oil prices and forecasts that oil will continue to be a key driver for U.S. economic growth.

The closure of the Strait of Hormuz has benefited American fertilizer producers, which investors are betting will gain market share while competition in the Middle East struggles to get their output to market. The shutdown of the strait has also blocked around 20% of the supply of liquefied natural gas, or LNG, upon which fertilizer makers in Europe and elsewhere rely.

CF Industries Holdings, which uses natural gas to produce nitrogen fertilizer, had its best quarter on record, rising nearly 68%, according to Dow Jones Market Data. Other big agricultural firms in North America, like pesticide producer Corteva and fertilizer supplier Nutrien, have also had strong quarters.

Higher oil prices, which boost demand for corn and soybeans that are blended into motor fuels, have benefited agricultural commodities. Wheat futures rose more than 20% in the first quarter to around $6 a bushel.

An increasing U.S. appetite for foreign intervention from Venezuela to Iran—and Trump’s request for a $1.5 trillion military budget—tipped financial markets in weapon makers’ favor in the first quarter. Continued geopolitical conflict could continue to play to their benefit.

While big defense names have driven gains in the sector, smaller companies have also performed well. Over the past 12 months, the State Street SPDR S&P Aerospace & Defense ETF, an equal-weight index with higher exposure to smaller defense tech names, has risen nearly 60%.

Seven of the world’s 10 largest publicly traded companies in the aerospace and defense industries are based in the U.S., and many of them have grown closer to the federal government in recent months. Shares of European arms manufacturers have also risen due to expectations of more military spending on the continent, while the war in Iran has lifted defense firms in South Korea and Japan.

The dollar extended its winning streak to three consecutive quarters in the first three months of the year. It has been helped by the U.S.’s position as a net oil exporter, and it could rise further due to the energy price shock, Morgan Stanley strategists have said.

It isn’t unheard of for the greenback to run in the green during U.S. interventions abroad. The First Persian Gulf War in 1990-91 was followed by 10 years of real dollar appreciation.

Stocks of companies exposed to Trump’s tariffs, such as construction firms and appliance makers, climbed after the Supreme Court struck down many of the duties in a long-awaited February ruling—even as hundreds of companies demand refunds from the U.S. government for lost profits.

Shares of Deere have risen more than 20% this past quarter after the Supreme Court ruling against Trump’s tariffs left investors more optimistic about the financial standing of the manufacturer of farm and construction equipment. Deere reported lower profit in the past quarter, dragged down by the tariffs, which the company previously expected would amount to a $300 million-a-quarter expense.

The jury is out on whether the Trump administration will manage to replace the tariffs to the same effect, but Deere has raised fiscal 2026 net income guidance to $5.0 billion from $4.5 billion previously.

Write to Jared Mitovich at jared.mitovich@wsj.com