April delivered broadly positive returns across risk assets, while fixed income markets experienced a more mixed environment as the ongoing tensions between the United States and Iran led investors to continually reassess the outlook for inflation and central bank policy. Reversing losses seen through March, equity markets benefited from resilient economic data and strong corporate earnings. Bond markets, however, exhibited a range of performance with corporate bonds delivering better returns as expectations of interest rate increases emerged.
Despite tensions between the US and Iran continuing to dominate headlines, and the Strait of Hormuz remaining severely disrupted, equity markets adopted a more positive outlook. Brent crude oil prices ended the month well above $100 per barrel, with ongoing ceasefire talks failing to result in a lasting agreement. Nevertheless, global equities delivered strong performance through the month, with continued economic resilience and positive momentum in technology-led sectors supporting renewed investor confidence rather than widespread risk aversion.
Source: Bloomberg
In the US, the S&P 500 rose approximately 8.7% in euro terms, extending the strong performance seen earlier in the year. Markets were buoyed by robust earnings reports, particularly within the technology and financial sectors, alongside continued optimism surrounding artificial intelligence and technology investment. Large-cap technology stocks again led performance, with the NASDAQ Composite rising 13.5% over the month.
Economic data in the US remained broadly positive with data suggesting the US labour market remained stable through the first quarter, although weaker household spending and geopolitical uncertainty may influence firms’ hiring intentions. That said, tax incentives have helped support consumer spending, offsetting some of the negative effects of higher fuel prices. One of the big drivers of returns has been corporate earnings with a substantial number of companies comfortably exceeding analyst expectations. Inflation data has yet to show any impact from the Middle East crisis.
European equities also posted gains, although performance was somewhat more modest increasing by roughly 5.1% in April. However, a slowdown in business activity across the region suggests that ongoing disruption in energy markets is beginning to feed through to the real economy, placing downward pressure on the region’s growth outlook. Europe’s energy reliance on the Middle East makes it more vulnerable than the oil self sufficient US economy.
The UK market lagged somewhat relative to its global peers, with the FTSE 100 returning approximately 3.1% in euro terms. The UK market’s heavier weighting towards energy, materials and defensive sectors limited participation in the global technology rally. Financials also experienced increased volatility as rising UK inflation created uncertainty around the future direction for interest rates of the Bank of England. Nevertheless, relatively attractive dividend yields and valuations continue to support investor interest.
In contrast, Asian and Emerging Market equities delivered particularly strong performance during the month. The MSCI Emerging Markets Index gained 12.7%. Both regions benefited from improving sentiment towards regional growth and renewed investor interest in global technology supply chains. Investor sentiment towards emerging markets was also supported by a softer US dollar and stabilising growth prospects in several key economies.
Overall, the global equity index rose 8.3% in April, highlighting the strength of the global relief rally.
Within bond markets, the picture was more mixed as investors reassessed the timing and scale of potential interest rate cuts from major central banks. Global bond returns were modestly positive overall, delivering a gain of roughly 0.1% with corporate bonds doing most of the “heavy lifting.”
Source: Bloomberg
Shifting expectations around monetary policy were the primary driver of volatility across government bond markets. US Treasuries declined by approximately 0.2% during the period, as stronger economic data and persistent inflation pressures pushed yields higher, suggesting rate cuts were less likely in the short-term.
Across Europe, government bonds fared slightly better, generating a modest return of around 0.3%, but risks remain due to ongoing wage pressures and persistent services inflation. In addition, inflation-linked bonds also recorded gains, reflecting continued demand for inflation protection
Overall, while fixed income returns were relatively muted compared with equities, the asset class continues to provide an important source of diversification and income. Yields remain significantly higher than those seen during the ultra-low interest rate environment of the past decade, improving the long-term outlook for bond investors. However, as uncertainty around inflation and interest rates persists, active asset allocation is becoming increasingly important to manage risk and ensure that fixed income continues to serve its role within diversified portfolios.
Looking ahead, markets will remain focused on inflation trends, central bank interest rate signals and the sustainability of corporate earnings growth. While volatility may persist as geopolitical developments lead investors to adjust expectations around interest rates, the broader economic backdrop remains relatively supportive. As always, diversification and adopting a long-term investment perspective remain central to navigating evolving market conditions.
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This publication was prepared by Bernard Walsh, Head of Investments & Pensions for Fairstone Asset Management DAC trading as Fairstone & askpaul.
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Information as of the date of publication 30/04/2026
