Market Recap: April 2026

Market commentary

• Supply disruptions near the Strait of Hormuz have pushed oil and gas prices higher, lifting headline inflation and increasing costs for consumers and businesses.
• With core inflation still above 3% — well over the Fed’s 2% target — energy costs are keeping policymakers cautious.
• Consumer spending is holding up, led by higher-income households benefiting from wealth gains, while lower-income consumers face more strain and rely on work, savings, or credit.
• Housing continues to weigh on growth, as high interest rates and affordability constraints suppress homebuilding, permits, and completions.

Select economic and market data

Equities

• Stocks surged in April, with the S&P 500 posting double-digit gains despite concerns over the potential economic fallout from a global energy shock.
• Driven by AI-focused mega-cap tech stocks, first-quarter S&P 500 earnings grew 27.1% year over year — the strongest pace since Q4 2021.

Fixed income

• With Fed policy unchanged, bond yields moved within a narrow range, with the 10-year U.S. Treasury yield ending April at 4.37%, up slightly from 4.32% the prior month.
• In line with equity strength, high-yield bonds — and to a lesser extent, corporate bonds — led fixed-income returns in April.

Strategic outlook

• Near-term caution toward equities is advisable, given heightened risks from geopolitical instability, trade uncertainty, and the potential for renewed inflationary pressures alongside an economic slowdown.
• Near-average expected returns projected for fixed income with the Fed on pause and rates reflective of economic conditions.
• Above-average volatility is likely given central bank involvement and geopolitical uncertainty.