Market Wrap-up and What’s to come in May
April 2026 was a strong month for U.S. equities, with all three major stock indexes posting notable gains on the back of robust earnings, encouraging economic data, and growing investor optimism.
More updates on the markets, economic data, and global news below.
Market Update: April
- The S&P 500 advanced 10% in April, closing at 7,209, a significant rebound from the prior month.
- The NASDAQ gained roughly 15%, its best month since April 2020, supported by a rebound in tech and communication services.
- The Dow also finished higher, posting its strongest monthly gain since November 2024.
- The rally widened across multiple sectors, a sign of broader market participation.
Corporate Earnings and Sector Highlights:
- Q1 earnings were a key driver of April’s strength. With about two-thirds of S&P 500 companies reported, blended earnings growth stood at roughly 27% — on pace for the highest rate since late 2021.
- Roughly 84% of reporting companies beat expectations, the highest beat rate since 2021, and net profit margins reached a record blended level.
Sector Highlights:
- Communication Services, Information Technology, and Consumer Discretionary led earnings growth, with strong reports from Caterpillar, Alphabet, and Apple.
- Energy results were mixed amid commodity volatility, though sector outlooks remain supported by elevated oil prices.
Economic Data: Rates, Inflation, Labor Market
- The Fed held its benchmark rate steady at 3.50%–3.75% at the April 28–29 meeting, the third consecutive hold.
- March CPI rose 3.3% year-over-year, with energy prices the main contributor.
- Weekly jobs data released through April pointed to continued labor market resilience, with initial claims falling to 189,000 in the final week of the month, among the lowest readings in decades.
Geopolitical & Notable Global Developments:
- The Strait of Hormuz remained a focal point for global markets. A fragile ceasefire took hold in early April, but tensions re-escalated in late April and early May, with the U.S. military engaging Iranian forces and the UAE coming under direct attack for the first time since the ceasefire began.
- U.S. naval operations have been working to reopen the strait to commercial traffic. Despite these efforts, shipping disruptions have continued to affect global energy supply expectations.
- Crude oil traded between roughly $100–$120 per barrel, keeping U.S. gasoline prices elevated and contributing to recent inflation readings.
- The Federal Reserve leadership transition remains in focus. Chair Powell’s term as Chair concludes May 15, with Kevin Warsh expected to succeed him. Notably, Powell announced he will remain on the Fed’s Board of Governors rather than departing entirely. He is the first outgoing Chair to do so since 1948.
Here’s What to Look for in may:
Key events and data releases to watch in include:
- Ongoing: Continued Q1 earnings reports
- May 8: April Jobs Report
- May 12: April CPI (Inflation) Release)
- May 15: Chair Powell’s term as Chair concludes; Senate is expected to confirm his successor.
- May 23: Memorial Day U.S. markets closed
April was a reminder that markets often work through uncertainty more constructively than headlines suggest. As we move into May, a thoughtful and diversified approach remains key to navigating evolving conditions and pursuing long-term goals.
Reach out to us anytime to discuss recent developments and ensure your investment strategy remains aligned with your long-term objectives.
Have a great month!
Sources:
https://www.federalreserve.gov/newsevents/pressreleases/monetary20260318a.htm
https://www.morningstar.com/news
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