Monthly Market Review

April 2026

U.S Overview

April delivered a strong recovery in contrast to March’s selloff, with U.S. equity markets staging one of their strongest monthly rebounds in years. The April announcement of a U.S.-Iran ceasefire eased fears that had weighed on markets, even as the underlying conflict remained unresolved and oil prices stayed elevated. The S&P 500 advanced approximately 10% on the month, while the Nasdaq jumped roughly 15% and the Dow rose 7%. Strong first-quarter earnings, particularly from large-cap technology, further buoyed the April rally. 

This rally was the dominant driver of April’s gains across our portfolios, with our higher-equity allocation portfolios capturing most of the performance. While the rebound is encouraging, we are mindful that the underlying geopolitical risks driving recent volatility have not been fully resolved, and that the economic consequences of current U.S. foreign policy continue to weigh on inflation, energy costs, and the longer-term recession risks. 

The Federal Reserve once again held interest rates steady at its April meeting. Officials cited elevated inflation-- in part reflecting the recent increase in global energy prices-- and pointed to developments in the Middle East as a key source of uncertainty. With the conflict continuing to feed energy-driven price increases, we expect the current cost-of-living crisis to remain a burden on middle and working-class families. It should also be noted that the April meeting is widely viewed as Chair Jerome Powell’s last in that role; Powell announced he would remain on the Board of Governors, while Kevin Warsh appears on track to be confirmed as the new Chair.

International Overview 

Much like the U.S. recovery, international developed markets rebounded in April as the ceasefire announcement improved sentiment. Europe’s STOXX 600 recovered a portion of its March losses, supported by an unexpectedly strong performance from European banks and a partial reopening of shipping through the Strait of Hormuz in mid-April. The European Central Bank held its key deposit rate steady at its April meeting, while acknowledging that risks to the eurozone economy had intensified because of the Iran conflict. The Bank of England likewise held its base rate steady, citing highly uncertain energy prices as U.K. inflation climbed once again. European equity strength contributed positively to the international allocations across our portfolios.

In Asia, the rebound was even more pronounced. Japan’s Nikkei 225 — the worst-performing major global index in March — staged a dramatic recovery, climbing back to fresh record highs by month-end on the back of strong export data and renewed enthusiasm for AI-related firms. The Bank of Japan held its policy rate steady but raised its inflation forecast for fiscal 2026. South Korea’s Kospi posted its best monthly performance in roughly three decades as technology optimism mitigated lingering Iran-war concerns. Chinese markets were comparatively stable, supported in part by robust national oil reserves and Moody’s revision of China’s sovereign outlook back to “stable” from “negative.” Strength in Japan and Korea added meaningfully to our portfolios’ international equity exposure, partially offsetting the lingering drag from March.

Emerging markets recovered alongside developed counterparts, with most regions posting positive returns for the month. Late in April, however, renewed Iran-related risks and the ongoing U.S. naval blockade weighed somewhat on emerging-market currencies, even as equities held on to monthly gains. This benefited the Diversified portfolios, which carry direct emerging market exposure through their international equity allocation.

What does this mean for you?

The same diversification that limited our portfolios’ downside in March allowed broader participation in April’s strong rebound. Our Diversified portfolios returned between 5.39% and 8.25% for the month. Our Fossil Free portfolios returned between 4.78% and 6.58%. 

The fixed income component of our portfolios reflected the continued uncertainty, with longer-dated Treasury yields trading in an elevated range as ongoing inflation concerns kept pressure on bond prices. The stabilizing role of bonds in periods of equity volatility remains an important feature of our portfolio construction. The sharp swing from March’s selloff to April’s rebound reinforces our belief that staying invested through turbulence will allow our portfolios to participate fully in the recovery.

What we are monitoring 

U.S.-Iran Military Conflict: A two-week ceasefire halted the active phase of fighting and was subsequently extended pending further negotiations. The Strait of Hormuz partially reopened mid-month, sending oil prices down sharply, though shipping volumes have not yet returned to pre-conflict levels, and a U.S. naval blockade of Iranian ports remains in place. While the de-escalation has been positive for markets, the situation remains fragile, and the longer-term path is uncertain. The damage sustained by oil and gas infrastructure in nations like Qatar may take several years to repair, leaving global production capacity diminished for the foreseeable future. We continue to closely monitor whether energy-driven inflation proves transitory or triggers more persistent economic damage, as well as how the leadership transition at the Federal Reserve may shape policy in the months ahead. 

Thank you for your continued trust and support. It is our privilege to serve as stewards of your financial assets.

Sincerely,

The Faith Foundation Team