Stocks Hit Record at End of Best Month Since 2020: Markets Wrap
(Bloomberg) — Signs of strength in the world’s largest economy fueled investor optimism about the outlook for Corporate America’s earnings, driving stocks to their best month since late 2020.
Equities hit fresh highs, with the S&P 500 extending its April surge to 10% as data showed US growth accelerated amid an AI-driven upswing in business investment. A gauge of small firms, whose fortunes are tied to domestic activity, added 2.2%. A drop in oil helped sentiment, lifting bonds. The yen climbed on reports of Japan intervention. In late hours, Apple Inc. reported revenue that topped estimates, helped by demand for the iPhone and Mac.
The artificial-intelligence engine was on full display in the first quarter, powering the economy through headwinds from a war-fueled increase in inflation. Consumers — historically the primary growth driver — continued to spend, bolstering corporate optimism.
“As long as the economy continues to grow and companies are able to grow earnings, we can see higher stock prices even in the face of higher energy prices and inflation,” said Chris Zaccarelli at Northlight Asset Management.
The caveat is: the longer the war drags on, he says we could see some pullbacks as fears ebb and flow.
A frenzied week of earnings reports offered a glimpse at how tech heavyweights are doing in AI. The upshot: Alphabet Inc.’s Google is seeing a clear payoff from its spending, while Meta Platforms Inc. is lagging behind.
Markets have recovered nicely from the first-quarter lows as earnings take over the narrative, but the question is whether that can hold up if energy prices remain elevated, according to Bret Kenwell at eToro.
“At the same time, investors will be watching how the Federal Reserve navigates this backdrop, with a likely more dovish chair entering what appears to be its most divided committee in decades,” he said.
The sharp rebound from the March lows pushed most major equity indexes back to record highs. The upside momentum has been fueled in part by signs of de-escalation of the conflict with Iran and hopes the Strait of Hormuz could reopen soon, according to Adam Turnquist at LPL Financial.
“Support for equities has also come from solid first-quarter earnings and economic data that have shown limited signs of deterioration,” he said. “However, ongoing geopolitical uncertainty, particularly surrounding Iran, and its implications for growth and inflation are likely to keep volatility elevated.”
As the calendar turns to May, Turnquist notes that seasonal trends re-enter the conversation. Historically, that’s been a relatively lackluster month for equities. More recently, however, the data tells a different story. Since 2013, the S&P 500 has averaged a 1.5% return.
Corporate Highlights:
Caterpillar Inc. delivered stronger-than-expected quarterly earnings and raised its long-term revenue outlook, supported by fast-growing sales from construction and power generation equipment. Qualcomm Inc. rallied after saying it was making headway in the lucrative data-center market and predicted that the China phone industry would bounce back. Eli Lilly & Co. raised its annual sales and profit forecast, as demand for obesity medications soared and thousands of patients started taking its new weight-loss pill before advertising for the drug had even begun. Mastercard Inc. slipped as the payments network warned that overseas spending growth on the firm’s cards had weakened in recent weeks. Ford Motor Co. warned of pressure from an unexpected rise in commodity costs, spooking investors even as the automaker raised its full-year profit outlook on demand for high-margin pickups and SUVs. What Bloomberg strategists say…
“The broadening rally in US equities will help the S&P 500 settle into a higher range as earnings hold up and economic data firms, buffering any de-risking from oil near recent highs.”
—Michael Ball, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 rose 1% as of 4 p.m. New York time The Nasdaq 100 rose 1% The Dow Jones Industrial Average rose 1.6% The MSCI World Index rose 1.2% Currencies
The Bloomberg Dollar Spot Index fell 0.8% The euro rose 0.5% to $1.1732 The British pound rose 1% to $1.3604 The Japanese yen rose 2.4% to 156.57 per dollar Cryptocurrencies
Bitcoin rose 0.9% to $76,351.71 Ether rose 0.9% to $2,260.82 Bonds
The yield on 10-year Treasuries declined five basis points to 4.38% Germany’s 10-year yield declined seven basis points to 3.04% Britain’s 10-year yield declined six basis points to 5.01% Commodities
West Texas Intermediate crude fell 1.4% to $105.35 a barrel Spot gold rose 1.5% to $4,617.31 an ounce ©2026 Bloomberg L.P.
