April Market Update: Record Highs Amid Ongoing Uncertainty

May 13, 2026

Sean Gross, CFP® | Co-Founder & CEO

April is a compelling reminder that markets can stage powerful recoveries even when investor concerns remain elevated. Despite ongoing conflict in the Middle East, major indices reached new all-time highs during the month. The S&P 500 gained 10.4% in April alone — one of its strongest monthly performances on record — echoing last year's tariff-driven volatility and subsequent recovery.

This doesn't mean markets will continue higher without interruption. Geopolitical tensions, an upcoming leadership transition at the Federal Reserve, and elevated energy prices will likely remain in focus in the months ahead. What April reinforces, however, is that maintaining a well-constructed portfolio aligned with long-term financial goals remains the most prudent approach, regardless of how challenging the environment may appear. 

Key Market and Economic Drivers in April

• The S&P 500 and Nasdaq gained 10.4% and 15.3% for the month, both ending at new all-time highs; the Dow Jones Industrial Average rose 7.1%.
• Volatility declined sharply, with the CBOE VIX falling from 25.3 to 16.9. International developed markets returned 7.0% (MSCI EAFE, USD terms); emerging markets returned 14.5% (MSCI EM).
• U.S. small-cap stocks jumped 12.2% (Russell 2000); mid-cap stocks gained 7.8% (S&P MidCap 400). 
• The 10-year Treasury yield ended the month nearly unchanged at 4.37%. The Bloomberg U.S. Aggregate Bond Index returned just 0.1%. 
• Brent crude ended April at $114/barrel, ranging from $92 to $121 intra-month; WTI closed at $105, as the Strait of Hormuz remained closed to shipping. 
• Gold slipped to $4,610/oz., a modest decline for the month. The U.S. Dollar Index fell to 98.1 from 99.96 the prior month. 

The Stock Market's Strong Recovery

April's advance may appear surprising given the backdrop of geopolitical tensions and policy uncertainty. History has consistently shown, however, that some of the market's strongest months come during periods of peak investor caution — a pattern seen across the pandemic shock of 2020, the inflation-driven bear market of 2022, and the tariff-driven pullback of early 2025. While recoveries are never guaranteed, they tend to arrive when least expected.

After a negative first quarter, the S&P 500 is now up 5.3% year-to-date. The accompanying chart shows the historical distribution of annual S&P 500 returns. Since 1928, markets have delivered positive annual returns in roughly two-thirds of years. Since 1980, that share rises to approximately three-quarters.

This is not to say markets always recover quickly — it's a reminder of just how difficult it is to time the market effectively. Recent years offer valuable lessons for navigating future periods of volatility.

Jerome Powell's Final Meeting as Federal Reserve Chair

At its April meeting, the Fed held its key policy rate steady at 3.50%–3.75%. Though broadly anticipated, the decision drew notable dissent: four of twelve voting members disagreed — the most since 1992. Three officials supported the hold but objected to language signaling potential future cuts; one governor pushed for an immediate cut, consistent with their position at every prior meeting.

The divide reflects both an impending leadership change and two competing economic challenges. The labor market is softening — job openings have fallen below the number of unemployed workers for the first time in years. At the same time, the conflict involving Iran and ongoing Strait of Hormuz disruptions have pushed oil prices higher, weighing on inflation. 

Ordinarily, a soft labor market favors rate cuts while rising inflation calls for hikes — leaving market expectations roughly split between the two outcomes later this year.

April marked Powell's final press conference as Fed Chair. He has held the role since succeeding Janet Yellen in 2018 and has served on the Board of Governors since 2012. Kevin Warsh, whose nomination has been approved by the Senate Banking Committee, is expected to be his successor. Powell noted he will remain on the Board until ongoing Justice Department legal matters are resolved and that he intends to act respectfully toward the incoming Chair.

While a leadership change introduces some uncertainty, markets and the broader economy have performed well across many different Fed Chairs and policy environments. A well-diversified portfolio is built to navigate exactly this kind of uncertainty.

Energy Prices and Disruptions at the Strait of Hormuz

Oil prices are one of the most direct ways the Iran conflict is affecting investors and consumers. Brent crude and WTI climbed back toward recent highs in April as the Strait of Hormuz remained closed to shipping, with ceasefire false starts driving significant price swings throughout the month.

Despite elevated oil prices, equities performed well. The key concern for investors is whether higher energy costs will begin filtering through to the broader economy. This "second-order effect" occurs when elevated oil and gasoline prices persist long enough to raise transportation and input costs for businesses — expenses that can ultimately be passed on to consumers through higher prices for goods and services.

Some historical perspective is useful here. Oil price shocks have often proven temporary once underlying conditions stabilize. The spike above $5/gallon for U.S. gasoline in 2022, for example, eased as supply improved — despite near-term pressure on household budgets. The U.S. is also now the world's largest oil and natural gas producer, providing considerably more insulation from global supply disruptions than in prior decades.

For investors, this environment underscores the value of broad diversification. Technology-driven sectors led last month, while energy has been a positive contributor year-to-date. Exposure across all parts of the market remains as important as ever.

The Bottom Line

April's rebound illustrates that meaningful gains can materialize even amid significant uncertainty. A flexible, well-constructed portfolio, aligned with your long-term financial goals, is designed to navigate exactly these kinds of environments.