On April 30, the S&P 500 closed at 7,209.01, its first-ever close above the 7,200 threshold.
Wall Street ended April on an upbeat, with all three major indices finishing at record levels on the last trading day of the month, and capping what proved to be the best monthly performance of US equities since November 2020. The rally was made despite a backdrop that would easily have derailed due to the ongoing war in the Middle East, oil prices almost at four-year highs, and the Federal Reserve holding the rates steady with increasing internal division.
Earnings won the argument.
How the month closed
On April 30, the S&P 500 closed at 7,209.01, its first-ever close above the 7,200 threshold. The Nasdaq settled at 24,892.31, and the Dow at 49,652.14. The three major indices are now trading far above their starting point in 2026, despite the downturn that followed the US-Iran conflict at the end of February.
|The S&P 500 only rose 1% on the last day alone, the Dow jumped 790 points or 1.6% and the Nasdaq rose 0.9% to its own record. The S&P 500 and Nasdaq Composite both soared more than 10 percent and 15 percent, respectively, in the month as a whole, their best performances since November 2020 and April 2020, respectively.
Earnings took the market
The driving force behind the gains of April was a Q1 earnings season that continued to outperform what analysts had been expecting, even as the backdrop of high energy costs and geopolitical uncertainty continued to play out.
Alphabet reported the highest quarter of its cloud business, and its revenue has surpassed expectations. The stock increased 10 percent on earnings day and increased more than a third during the month of April – its best monthly performance since 2004. The company increased its 2026 capex guidance to up to $190 billion, indicating that it is confident in its AI infrastructure deployment. According to Alphabet CEO Sundar Pichai, investments in artificial intelligence were lightening up every part of the business.
Caterpillar reached an all-time high after it announced improved-than-anticipated quarterly results and increased its annual revenue outlooks. The industrial bellwether is performing 53% better in 2026, and is largely seen as a proxy of the health of the global economy. The stock of Qualcomm shot up 37% after it beat Q2 earnings estimates and announced that a major hyperscaler custom silicon engagement is on track to first ship later this year – an AI tailwind that the market had not fully priced in.
Not all the outcomes were rejoiced. Meta Platforms tumbled 8.7% even though the company behind Facebook and Instagram made more profit than expected. Investors concerned with its higher projection of data centres and AI investment spending were concerned about the amount of money being spent before it became evident.
FactSet data showed that analysts were projecting full-year 2026 earnings growth of 18.6% with quarterly growth rates of 20.6, 22.7 and 20.4 expected in Q2, Q3 and Q4 respectively. The forward 12-month price-to-earnings ratio was 20.9, which is higher than the five-year average of 19.9 and the ten-year average of 18.9.
The Fed held, but with cracks
At the April meeting, the Federal Reserve maintained the same rates, and it was the third consecutive meeting where policymakers decided to hold. The move comes after three straight reductions last year. The fed funds target range is at 3.50-3.75% whereas the 10-year US Treasury yield ended the month at 4.40 percent.
During the eight years of his tenure as Fed chair, Jerome Powell has enjoyed a high level of consensus in the committee. The policymakers are now faced with a more complex climate where inflation has been well above the 2% mark, and both the tariffs imposed by Trump and the high energy prices are adding upward pressure that has lasted long enough to cause concern about its sustainability.
Two regional Fed presidents, Neel Kashkari of Minneapolis and Beth Hammack of Cleveland, disagreed with the wording of the post-meeting statement, saying that any type of forward guidance was inappropriate in the current environment. Incoming data is now being monitored by markets in the event of a signal on when or whether cuts will be resumed. The April meeting is also largely anticipated to be the last of Powell as the chair, with Kevin Warsh being the next chair.
Oil was the wild card
Large-cap stocks beat small-caps, and value beat growth as another rise in oil prices boosted the energy industry. The oil prices were fluctuating up to April and the West Texas Intermediate closed one week higher than 7%. The final days of the month saw a momentary rise in the price of the crude oil, which rose to $120 a barrel, before it fell back, as Trump rejected the offer by Iran to reopen the Strait of Hormuz, signalling the US naval blockade would continue to remain in force until a nuclear deal was reached.
Angelo Kourkafas, senior global investment strategist at Edward Jones, summed up the dynamic in a nice way: There is this big tug of war, but the earnings side is winning so far. The market is trying to look through near-term uncertainty – but of course, the longer it lasts, the more acute the pressures are.
Global markets
The FTSE 100 of London shot up by 1.6% on April 30, after the Bank of England maintained its main interest rate unchanged, following similar moves by the Fed and the Bank of Japan. The DAX in Germany gained 1.4% and the CAC 40 in France gained 0.5% after the European central bank also kept the rates steady. The Hang Seng in Hong Kong dropped 1.3% and Shanghai stocks gained 0.1% after a report indicated that factory activity in China slowed slightly in April but still was in expansion territory after two consecutive months.
What May brings
As April’s record run is now in the books, it is now a matter of whether the market can carry on the momentum into May. The major questions heading into the month are whether the US-Iran conflict intensifies or a deal through Pakistani mediators takes shape, whether the Strait of Hormuz can reopen and defuse the oil shock on household budgets, how incoming Fed Chair Kevin Warsh signals his approach to rate policy and whether the Strait of Hormuz can reopen and defuse the oil shock on household budgets.
