Global shares rose in April 2026, as investors rotated back into risk assets following a fragile ceasefire in the Middle East and renewed enthusiasm for technology-led growth. While the rally was widespread, performance was highly concentrated in markets and sectors tied to the global artificial intelligence investment cycle.
Developed market equities posted solid gains, yet they were notably outperformed by emerging markets, particularly in Asia, where semiconductor and hardware-focused economies benefited from strong demand.
Conversely, the month remained challenging for bond markets, as elevated crude oil prices and persistent inflation expectations kept yields volatile and tempered the outlook for central bank easing.
Global equities
Global equities, as measured by the MSCI World Index, rose by 9.6% in April, with investors regaining confidence in corporate profitability and stabilising economic conditions. The US posted a double-digit return but was still surpassed by both emerging markets and Asia ex-Japan. Technology-orientated companies largely drove those advances.
North Asian markets, in particular, benefited from robust demand tied to the ongoing AI build-out, which supported semiconductor companies and hardware exporters. Other developed markets also moved higher as improving business sentiment and a reduced risk of economic stagnation supported equities.
Across emerging markets, performance was bifurcated. While the technology exporters like Korea and Taiwan soared, countries with domestically orientated economies saw muted returns amid ongoing macroeconomic headwinds.
US
US equities rebounded strongly in April, with the S&P 500 Index rising 10.5%, one of its strongest monthly gains in recent years. The advance was led by large-cap growth stocks, particularly in technology and communication services, as investor enthusiasm for artificial intelligence (AI) continued to shape market leadership. Semiconductor and platform companies were among the strongest performers, as they were supported by expectations of sustained demand tied to AI infrastructure build-out and data-centre investment.
Earnings season reinforced the rally, with a high proportion of companies exceeding expectations. Larger technology firms stood out, while financials and industrials also posted solid returns, as they benefited from stable economic data and resilient consumer demand.
An improving macroeconomic backdrop also boosted the market, giving investors reasons to be more confident and more willing to assume risk after a volatile March. While energy prices were still elevated because of the Middle East conflict, they showed signs of stabilisation, and that enabled investors to refocus on corporate fundamentals.
Even with market broadening, a small group of mega-cap names still accounted for a disproportionate share of the US market performance.
Eurozone
Eurozone equities rose in April. The surge reflected relief from a US-Iran ceasefire and manufacturing activity tied to inventory restocking rather than genuine demand.
Sector performance reflected investors’ preference for cyclical stocks. Industrials and capital goods in particular posted strong returns, as a result of increased manufacturing activity and trade optimism. Banks advanced on the prospect of higher interest rates and better net interest margins.
Performance in the information technology sector was sharply split. Hardware and equipment rallied on capital expenditure optimism and easing supply chains, while software underperformed as firms trimmed IT budgets amid economic uncertainty. Communication services weakened overall, as they were pressured by telecoms’ fading demand and margin squeezes. The media and entertainment industries held firm, however, on consumer spending recovery.
The overall market rally occurred against a weak macroeconomic backdrop, with euro area GDP growth at just 0.1% for the first quarter and inflation at 3% in April. The flash eurozone composite purchasing managers index (PMI) for April came in at a 17-month low of 48.6 (a reading below 50 indicates a contraction in economic activity). Those conditions are likely to keep the European Central Bank cautious on interest rates.
UK
UK equities, as measured by the FTSE All-Share Index, rose 2.8% in sterling terms in April, with gains driven by a narrow group of sectors. Banks were a key area of strength, as they benefited from a still-supportive interest rate environment, resilient net interest margins and improved sentiment about credit quality.
Technology hardware and equipment outperformed as investor demand for AI and digital infrastructure intensified, while strong global earnings momentum across semiconductor and hardware-linked companies provided additional support.
The UK index’s relatively elevated weighting in energy and healthcare capped its advance. Oil and gas producers declined as profit-taking weighed on the sector despite ongoing geopolitical tensions. Pharmaceuticals and biotechnology also lagged, as investors rotated away from defensive sectors into higher-growth opportunities.
UK inflation, as measured by the consumer prices index (CPI), was 3.3% in the 12 months to end-March. The Bank of England kept interest rates steady at 3.75% and said that it “stands ready to act as necessary” to ensure that CPI remains on track to meet the 2% target in the medium term.
Japan
Japanese equities rebounded after March’s sharp correction, with TOPIX Total Return up 6.6% and the Nikkei 225 rising by 16.1% (in yen terms). Stock market movements were supported mainly by shifts in Middle East headlines. Markets focused on ceasefire negotiations between the US and Iran. Despite intermittent progress, expectations for an earlier resolution improved risk appetite and helped drive the recovery.
Sector performance was led by AI-related names, reflecting solid near-term fundamentals and continued medium- to long-term growth expectations. At month-end, the Bank of Japan left rates unchanged, as expected, but it sounded more hawkish than anticipated, and that supported bank shares.
Overall, the rebound reflected improved geopolitical expectations, ongoing leadership from AI-linked stocks, and firmer domestic rate expectations.
Emerging markets
Emerging markets rebounded sharply in April, more than offsetting March’s losses following the fallout from the Middle Eastern conflict. The MSCI EM index notably outperformed the MSCI World Index and posted its strongest absolute performance since 2009. The rebound was led by the technology orientated markets of Taiwan and Korea, as markets judged the conflict’s broader economic impacts and supply chain disruptions to be contained. The US and Iran announced a two-week ceasefire, supporting a return in risk appetite.
Korean equities were the standout performer in April, rallying sharply to new all-time highs, as market sentiment reversed following the significant sell-off in March. Expectations of an Iran-US deal helped alleviate anxieties about rising input costs and supply chain disruptions, particularly for Korea’s import-dependent economy. Furthermore, upbeat earnings and outlooks across the AI supply chain supported the rally in the tech-heavy Korean market which plays a key role in the global AI ecosystem. It was a similar story in Taiwan, where the rally was largely driven by strong Q1 2026 earnings for AI related names coupled with increases in capital expenditure guidance by US hyperscalers.
Hungary also outperformed in April, delivering double-digit returns in US dollar terms. The Tisza Party’s landslide general election win ended Orban’s 16 years in power and raised the prospects of unlocking EU funds and constitutional reform.
Despite posting strong absolute returns in US dollar terms, India lagged its regional peers as the country’s IT services sector continues to be seen as at risk from AI. Despite resilient GDP growth, rising oil prices for the energy importing country have led to inflation risks and earnings concerns for a market with already expensive valuations. Some of the smaller markets including Poland, the UAE, Thailand and Malaysia also underperformed but posted positive returns in US dollar terms.
Brazil underperformed, despite the economy showing broad-based momentum. China, South Africa and Saudi Arabia also finished behind the index in April. China’s performance was muted as the market had limited exposure to the global AI hardware upswing driving EM returns while onshore investors remain concerned around the effects of an elevated oil price. The same was true in South Africa where concerns of a persistently heightened oil price weighed on investor sentiment with inflation concerns looming once more, while Saudi Arabian equities fell against a backdrop of subdued oil output and regional risk. Indonesia was the worst performing market as MSCI extended its market reforms review to June 2026, delaying any reclassification to frontier status.
Asia ex Japan
The MSCI AC Asia ex Japan Index rose 16.3% in April (US dollar terms). Taiwan and South Korea led performance, supported by their dominant positions in semiconductor manufacturing and advanced memory, which continue to benefit from strong global demand tied to AI infrastructure and data-centre expansion.
India also delivered solid gains, underpinned by resilient domestic growth and continued investor inflows. In contrast, Indonesia declined, weighed down by its sensitivity to higher energy prices and external balances. China and Hong Kong posted more muted performance amid ongoing concerns around domestic growth and property sector weakness.
At the sector level, information technology was the clear standout, as its returns were driven by sustained momentum in AI-related investment and strong earnings expectations across semiconductor and hardware-linked companies. Industrials also performed well, as they benefited from their exposure to capital expenditure and infrastructure build-out linked to the AI cycle. Materials added to gains as improving global manufacturing sentiment supported demand.
Communication services was the weakest sector, as it faced more subdued earnings trends and had limited direct exposure to the AI-driven catalysts driving the broader market.
Global bonds
April was another volatile month for global bond markets. Oil prices remained elevated, a reflection of the ongoing disruption in the Middle East, with Brent crude briefly moving above $120 a barrel for the first time since 2022. While the market is expecting interest rates to rise amid rising inflation, so far central banks have been taking a cautious approach.
Government bond yields initially fell on news of a temporary ceasefire between the US and Iran, reflecting optimism that this would lead to a broader de-escalation. However, by mid-April, negotiations had stalled and, with the Strait of Hormuz remaining effectively closed, the market’s focus shifted back towards stagflation, driving yields higher.
Corporate bond markets held up comparatively well and generated positive returns, with interest-rate volatility weighing on returns as opposed to any evidence of a deterioration of corporate fundamentals. Investment grade credit spreads, having widened modestly during risk‑off episodes, ended the month tighter, marking an outperformance over government bonds. High yield corporate bond markets outperformed investment grade, with euro-denominated issuers, on average, achieving better returns than the US across both categories.
US Treasury yields rose across the curve (yields move inversely to prices). Interest rates were kept on hold at 3.50-3.75% at the month-end Federal Open Market Committee meeting, with one dovish dissent supporting a 25 basis point rate cut and three hawkish dissents over the inclusion of an easing bias in the statement. During the press conference, Federal Reserve (Fed) Chair Jerome Powell noted that the “policy stance is in a good place for us to hold” amid the uncertainty stemming from the Middle East. Meanwhile, the Senate Banking Committee approved Kevin Warsh’s nomination, moving him a step closer to succeeding Powell as Chair when Powell’s term ends in May. Powell confirmed that he will be staying on as a Fed Governor.
Eurozone government bond markets remained particularly sensitive to developments in the Middle East given the region’s reliance on energy imports, with Germany’s 10-year Bund yield hitting a post-2011 high. However, in a reversal of last month’s trend, peripheral markets outperformed the core. Hungary was the standout performer on the month, following April’s parliamentary election, which delivered a decisive victory to the opposition Tisza Party and introduced a higher probability of frozen EU funds being unlocked. The European Central Bank stayed on hold, but the messaging was one of caution.
In the UK, the 10-year yield hit the highest level since 2008. While the impact from sustained higher energy prices on inflation was largely responsible for the sell-off, political and fiscal vulnerabilities ahead of May’s local elections also weighed on the performance of gilts. A big defeat at the local elections would inevitably focus minds within the Labour Party on what it needs to do to regain public support. Meanwhile, the Bank of England’s monetary policy committee voted 8-1 to keep the base rate at 3.75%, with the meeting minutes highlighting the high degree of uncertainty faced by the committee.
Commodities
Commodities gained in April with the S&P GSCI up 6.4% in April, driven by energy strength. Brent and West Texas Intermediate (WTI) crude made exceptional gains. The energy rally was propelled by the conflict between Iran and the US and concerns about oil flows through the Strait of Hormuz. Brent closed the month above $100 per barrel. Natural gas was the weakest performer, reflecting ample supply and mild seasonal demand.
Nickel remained a standout industrial metal, supported by electrification demand and persistent supply constraints, while copper advanced on structural demand from global grid upgrades, electric vehicles, data-centres, and renewable energy projects.
Sugar also declined because strong Brazilian and Indian production outpaced demand. Coffee dipped as robust harvests eased prior tightness in that market. Precious metals, including gold and silver, declined as the broad energy rally and shifting interest rate expectations dampened investor appetite for safe-haven assets.
Please note
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
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