April was marked by a significant recovery in global financial markets, particularly in the United States, where the major stock indices posted one of their best monthly performances in recent years. Following the volatility seen during the first quarter, market conditions improved significantly, supported by a combination of contained inflation and better-than-expected corporate earnings. The S&P 500 rose more than 10% during the month, while the Nasdaq advanced 15.29%, regaining the lead, driven primarily by companies linked to artificial intelligence.

In the corporate sector, the first-quarter earnings season once again confirmed the strength of U.S. corporate earnings. S&P 500 companies reported solid growth in revenue and earnings of 11.3% and 27.7%, respectively, driven by operational efficiency, cost discipline, and demand that continues to show outstanding growth, particularly in sectors related to artificial intelligence. The so-called “Magnificent 7” continued to play a central role in the market, with companies linked to artificial intelligence infrastructure and digital services standing out in particular, as the outlook for structural growth remains very favorable. However, the market has begun to show greater differentiation among issuers, favoring companies with consistent cash flow generation and more reasonable valuations.

In the fixed-income market, high-yield bonds were among the best-performing segments in April, benefiting from strong risk appetite in the markets and a further narrowing of credit spreads. Investment-grade corporate bonds also performed well, supported by solid balance sheets, low default rates, and a reduced perception of systemic risk.

On the monetary policy front, the Federal Reserve maintained a cautious tone and reiterated that any rate adjustments will depend strictly on the evolution of inflation and the performance of economic activity. Contrary to expectations observed months ago, the market has significantly reduced the probability of benchmark rate cuts in 2026, reflecting a U.S. economy that is more resilient than anticipated and inflation that, while gradually moderating, remains above the Fed’s target.

Internationally, the dollar remained weak during the period, reflecting both interest rate convergence and increased caution regarding fiscal and trade policy in the United States. This environment favored the relative performance of emerging markets, while tensions in the Middle East remained a significant factor for the markets; however, despite temporary episodes of volatility in energy and commodities, the market has maintained the expectation that the conflict will remain contained and will not lead to structural impacts on global trade or energy supply. Historically, such events tend to generate temporary volatility, particularly when they do not have a sustained impact on economic fundamentals.

In short, April marked a positive turning point for financial markets. The combination of falling inflation and exceptional corporate earnings enabled a significant recovery in risk assets, particularly in U.S. equities. And while risks associated with elevated valuations and geopolitical factors persist, the macroeconomic environment remains consistent with moderate growth and earnings expansion, supporting a constructive outlook for risk assets through the remainder of 2026.

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