Monthly Market Report – April 2026

The evolution of the conflict in Iran once again dominated market attention in April, although during the second half of the month the earnings season gained prominence. Equities and bonds interpreted the impact of the conflict differently, and clear macroeconomic divergences between the United States and Europe are beginning to emerge.

On April 8, Trump announced a ceasefire that would allow the start of a new round of negotiations with Iran. These negotiations took place in Islamabad on April 11 and 12 without reaching a concrete agreement, as Iran refused to abandon its nuclear program. Following this, Trump announced that he would block the passage of any Iranian-flagged vessel with origin or destination in Iran attempting to cross the Strait of Hormuz.

Israel and Lebanon also announced a temporary truce, allowing the Strait of Hormuz to reopen for 24 hours. On Saturday, April 18, several vessels managed to cross the strait. However, the United States intercepted an Iranian vessel on Sunday, April 19, which resulted in Iranian attacks against several ships crossing Hormuz at that time. Since then and until the end of April, maritime traffic through the Strait of Hormuz has remained halted.

Although Trump extended the truce indefinitely, the second attempt at a meeting did not take place. Subsequently, Iran prepared a proposal outlining the basis for starting the next round of negotiations, but it was rejected by the United States.

The objective of the United States has shifted from military pressure to economic pressure. The blockade of Iranian vessels aims to limit the country’s revenues. Additionally, Iran has already exceeded half of its oil storage capacity. Reaching the storage limit would imply having to shut down extraction wells; these wells are old and rely on obsolete technology, which could result in permanent losses to its reserves if temporarily closed.

Brent crude oil closed April at USD 114.01 per barrel, a level very similar to that reached at the end of March. Initial optimism led the commodity to fall below USD 90 in mid-March. Subsequently, as the situation continued and new negotiation rounds failed to materialize, oil prices experienced a steady rebound, recovering almost all of the previous correction.

Equity markets posted significant gains in April, particularly in the United States. U.S. indices reached relevant technical levels in March, advanced during the first half of April due to renewed optimism following the Iran ceasefire, and reached new all-time highs on the back of a strong first-quarter earnings season.

The S&P 500 also achieved double-digit monthly returns, rising +10.42%. European figures were notable but more moderate and were concentrated exclusively during the first half of the month, with the Euro Stoxx 50 gaining +5.60% in April. As a result, the U.S. index moved ahead of its European counterpart in 2026 accumulated returns, with a difference of 375 basis points (+5.31% for the S&P 500 versus +1.56% for the Euro Stoxx 50).

In the United States, the first-quarter 2026 earnings season showed figures well above analysts’ expectations. This, together with renewed interest in artificial intelligence, allowed Wall Street indices to look past the Iran conflict and reach new all-time highs, with the S&P 500 surpassing 7,200 points.

Europe’s greater energy dependence prevented the region’s indices from matching the performance of U.S. markets.

Regarding fixed income, its performance differed from that observed in equity markets. Initially, yield curves shifted lower, although they gradually returned to the levels where they started the month. Markets continue to price in a shift in monetary policy, particularly in Europe. At the end of April, markets were pricing in 2 rate hikes from the ECB, while the Fed was expected to keep rates unchanged throughout 2026.

The Iran ceasefire reduced upward pressure on the U.S. dollar. The EUR/USD exchange rate rose to around 1.18 EUR/USD in mid-April before slightly correcting towards the 1.17 EUR/USD area.

Finally, the macroeconomic outlook is beginning to reflect two relevant factors:

• Inflation is starting to feel the impact of the rise in oil prices.
• The Iran conflict is generating price increases in the United States, while in Europe it is affecting growth and pointing towards a stagflationary scenario.

The U.S. price indicator rose to +3.3% in March compared with +2.4% previously, while in Europe inflation stood at +2.6% versus +1.90% previously. Estimates for European CPI in April place the figure around +3.0%.

Regarding growth, data for the first quarter of 2026 shows U.S. GDP growth of +2.0%, contrasting with +0.1% for the eurozone as a whole over the same period.