1. Equities – Markets Staged a Powerful Recovery, with Broad Participation
April delivered one of the strongest monthly rebounds in recent memory. The S&P 500 gained 10.49% on a total-return basis, fully recovering March’s pullback and pushing the index to fresh all-time highs by mid-month. The recovery was broad and encouraging: technology and communication services led the way as investor confidence in artificial intelligence returned as a primary market driver, but gains were not limited to any single sector. The Nasdaq logged its longest daily winning streak since 1992, and the S&P 500 crossed 7,000 for the first time in its history. Smaller U.S. companies, as measured by the Russell 2000, rose 12.29% for the month, a meaningful sign that the recovery extended well beyond large-cap names. International markets also participated, though returns were less uniform. Emerging market stocks gained 14.74%, recovering a substantial portion of March’s losses, while developed international markets (MSCI EAFE) gained 7.56% for the month, a solid recovery that was partially tempered in the final week by rising oil prices and a softer European economic backdrop. The MSCI ACWI, which tracks stocks across the globe, gained 10.22% for the month. First-quarter corporate earnings reports came in ahead of expectations for the majority of reporting companies, reinforcing confidence that the underlying business environment remains constructive despite the geopolitical backdrop.
2. Bonds – Income Remains Attractive as Yields Settled Near Recent Highs
Bond markets navigated a more mixed path in April than equities did. Early in the month, the Iran ceasefire and falling oil prices created a brief tailwind for bonds, with the 10-year Treasury yield dipping toward 4.32% following the CPI release on April 10. However, yields moved back higher through the second half of the month as diplomatic progress stalled and oil prices surged again. The 10-year U.S. Treasury yield closed April at 4.37%, roughly 6 basis points above where it ended March, while the 2-year yield settled at 3.87%, leaving the yield curve with a 50-basis-point positive slope. The Bloomberg U.S. Aggregate Bond Index returned 0.11% for the full month, a modest but positive outcome given the headwinds from rising yields in the back half of April. Corporate bonds, both investment-grade and high-yield, held up well supported by the improving equity environment and solid earnings. For income-focused investors, the takeaway remains constructive: yields across the Treasury and investment-grade curve are at their most attractive levels in years, and bonds continue to play their intended role of generating reliable income and providing a measure of stability when equity markets move sharply in either direction.
3. The Federal Reserve and Global Central Banks – A Historic Leadership Transition as the Fed Held Steady
April’s Federal Reserve meeting on the 29th and 30th was one of the most consequential in recent years, not only because of the rate decision but because of what it represented. The FOMC held rates unchanged at 3.50 to 3.75% by an 8-to-4 vote, the widest split in recent memory. Three of the four dissenters believed the Fed’s forward guidance should have been tightened to remove language suggesting future rate cuts remain on the table, reflecting genuine internal debate about the persistence of energy-driven inflation. One member dissented in favor of an immediate cut. The meeting also marked Chair Jerome Powell’s final press conference at the helm of the central bank, as his term as chair expires in May. Powell offered gracious remarks about the transition and expressed confidence in the Fed’s institutional framework. Kevin Warsh, the president’s nominee to succeed him, cleared the Senate Banking Committee during the month and is expected to receive a full Senate confirmation vote in the near term. The Fed’s institutional independence and long-established decision-making process remain fully intact through the transition. The ECB held its deposit rate at 2.00% and the Bank of England’s rate remained at 3.75% following its March decision, as both central banks balanced elevated energy prices against softening growth signals in their respective economies.
4. The Economy – Growth Held Up Well; Inflation Reflected the Energy Spike as Expected
The economic data released in April pointed to an economy with genuine underlying resilience. The March CPI report, released April 10, showed overall prices rising 3.3% over the prior year, with a monthly increase of 0.9%. That jump was almost entirely anticipated: it was the first full inflation reading to capture the surge in energy costs following the conflict that began in late February. Core CPI, which strips out food and energy and is a better indicator of underlying inflation trends, came in at 2.6% year-over-year, a more contained reading that suggests inflation pressures outside of energy remain manageable. Retail sales rose a strong 1.7% in March, the best monthly gain since early 2023, indicating that consumers remained active despite higher fuel prices at the pump. Factory activity continued to expand, with the S&P Global Manufacturing PMI at 54.0, while the services sector (which covers restaurants, travel, healthcare, and the like) also stayed in expansion at 51.3. The first advance estimate of first-quarter 2026 GDP was expected to show a meaningful rebound from the fourth quarter’s revised 0.5% annualized pace, with consensus estimates pointing toward growth near 2.1%. The broader takeaway is that the economy continued to expand through a significant external shock, a sign of genuine underlying strength.
5. Global Events and U.S. Fiscal Policy – The Strait of Hormuz Remains the Market’s Central Variable
The trajectory of the Iran conflict shaped the mood of April’s markets from start to finish. A ceasefire was announced in early April, which provided an initial wave of relief: oil prices fell sharply, with WTI declining 13% to around $97 in the week following the announcement, and equity markets surged on the reduced risk premium. However, that relief proved partial. The Strait of Hormuz remained effectively closed throughout the month as both sides maintained their respective blockades, negotiations in Pakistan toward a lasting agreement stalled, and by late April reports emerged that U.S. Central Command was briefing the president on potential additional military options. Brent crude briefly touched $126 per barrel on April 30, its highest level since 2022, before settling around $114, while WTI finished the month near $105 to $107, roughly 5% higher than where it began. These elevated prices continue to reflect a specific and identifiable supply disruption rather than a sign of structural change in energy markets. Analysts broadly expect that any diplomatic resolution allowing shipping to resume would trigger an immediate oil price decline of $10 to $20 per barrel. The 60-day congressional deadline related to the conflict under the War Powers Resolution fell on May 1, adding a near-term policy dimension. The UAE’s withdrawal from OPEC+ during the month introduced another variable in the global energy supply picture. On the domestic fiscal front, the partial government shutdown that defined March was resolved, and the administration’s FY2027 budget proposal, including a significant proposed increase in defense spending, was submitted to Congress during the month.
6. Bottom Line – The Recovery Validates the Discipline of Staying the Course
April was an encouraging reminder of why a disciplined, long-term approach to investing works. Those who held their positions through March’s volatility were rewarded with a recovery that, in a single month, recovered essentially all of the ground that had been lost and then some. The S&P 500’s 10.49% total return and the MSCI ACWI’s 10.22% gain stand as a compelling case study in the cost of stepping out of markets at the wrong moment. That kind of rebound, while not guaranteed, has been a consistent feature of recoveries following geopolitically driven pullbacks throughout market history. Looking ahead, the key variable remains the Strait of Hormuz. A diplomatic resolution that allows shipping to resume would likely lift sentiment further across stocks and bonds alike, reduce inflation pressures meaningfully, and create room for the Federal Reserve to eventually resume its path toward lower interest rates. We are watching the ongoing negotiations, the May inflation data, and the leadership transition at the Fed closely, and we will continue to keep you informed as those situations develop. In the meantime, the portfolio construction principles we advocate, quality U.S. equities for long-term growth, international diversification at attractive valuations, and fixed income generating real income, remain exactly the right framework for navigating the environment ahead. As always, we are available to discuss any questions about how these developments relate to your specific financial plan.
Disclosure
This material is provided by Gryphon Financial Partners, LLC (“Gryphon”) for informational purposes only. It is not intended as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Facts presented have been obtained from sources believed to be reliable, though Gryphon cannot guarantee their accuracy or completeness. Gryphon does not provide tax, accounting, or legal advice. Individuals should seek such guidance from qualified professionals based on their specific circumstances.