April 2026 Commentary: Houston, Do We Have a Problem?

Summary

• Despite continued geopolitical uncertainty, U.S. large-cap stocks, as proxied by the S&P 500 Index, rose 11% in April, making it the fourth-best month since January 2000. U.S. small-cap stocks gained 12% over the month.
• The U.S. consumer remains resilient, bolstered by higher tax refunds. Personal spending rose 0.9% in March.
• Kevin Warsh is expected to take over as Federal Reserve Chair in mid-May, at a time when markets are no longer pricing interest rate cuts in 2026.
• Corporate profit margins are tracking at a 15-year high, while first quarter earnings growth for the S&P 500 has been revised upwards to 27%.
• We believe that energy prices, driven by geopolitical disruption, may be the key swing factor for markets. If they don’t stabilize, we would expect further divergence between sectors and countries that are overly reliant on imported oil.

Read and download the commentary here.