08/05/2026
Market review - April 2026
The Big Picture: Focus on the Positive
Financial markets demonstrated remarkable resilience in April. Following the turbulent weeks since the outbreak of the Middle East conflict, investors are increasingly looking ahead. The temporary ceasefire between the US and Iran brought relief, noticeably shifting attention toward positive economic news. The US economy grew solidly in the first quarter, driven by a sustained investment boom in artificial intelligence. The ongoing earnings season delivered positive surprises: the vast majority of American companies beat expectations, with technology giants such as Alphabet and Qualcomm reporting strong results. Encouragingly, gains were not confined to a handful of large names but spread more broadly across sectors. Industrial bellwethers such as Caterpillar also impressed, confirming robust demand in the real economy. Markets responded with significant gains. Asia too was in high spirits, with Japan and South Korea leading the way, while China reported solid first-quarter growth despite mixed purchasing managers’ indices. April ranks among the strongest stock market months in recent years.
Switzerland: A safe haven, but not entirely unaffected
Europe’s economy is sending mixed signals. Industry appears remarkably resilient at first glance, yet closer inspection reveals that much of this strength stems from stockpiling. Companies are securing raw materials and inputs ahead of anticipated price increases and supply disruptions — a sign of uncertainty rather than confidence. The picture is clearer in the services sector, which carries even greater economic weight: it slipped into contraction territory for the first time in a considerable while, as consumers pulled back in the face of higher energy and living costs. Business sentiment in Germany fell to its lowest level in years, and consumer expectations across the eurozone are as depressed as they were in early 2023. Energy-intensive industries such as chemicals and logistics are feeling the headwind most acutely. Switzerland, by contrast, remains stable. Inflation stays low, the labour market holds up well, and the Swiss National Bank left interest rates unchanged. Consumer sentiment softened slightly, but the impact of the conflict remains more moderate than in neighbouring countries.
The Underestimated Risk: What if the Blockade Persists?
What is easy to lose sight of is the other side of the market recovery. Energy prices remain well above pre-war levels despite the ceasefire. Inflation is picking up noticeably in both the US and Europe, and consumer inflation expectations have risen markedly. Most worryingly, price pressures are no longer confined to petrol and heating oil but are spreading to transport costs, food, and other everyday goods. Should the blockade of the Strait of Hormuz last longer than expected, these pressures could become entrenched and weigh on household purchasing power to an extent that quickly offsets the positive impulses from the earnings season. Central banks would then find themselves in an extremely difficult position: a weakening economy needs support, yet inflation must be brought under control. The ECB has already signalled that a rate hike could be on the table this summer. Markets appear to be underestimating this scenario, pricing in a rapid normalisation of the situation in the Middle East. Whether that confidence is warranted will become clear in the weeks ahead.
Equity markets
April was an exceptionally strong month for equities. Buoyed by a better-than-expected earnings season and the sustained artificial intelligence boom, American and Asian markets in particular recorded sharp gains. The Middle East ceasefire contributed further to the calmer mood, as evidenced by the marked decline in volatility indices. European markets also benefited from the improved sentiment, albeit to a lesser degree. The Swiss market performed solidly but trailed the international pace. The breadth of the recovery is an encouraging sign for the durability of the upturn.
Interest rates
The major central banks left their policy rates unchanged in April. Both the US Federal Reserve and the European Central Bank are in wait-and-see mode, monitoring the further development of energy prices and inflation before taking their next step. In the US, rate cuts appear postponed indefinitely as inflationary pressures prove more stubborn than expected. In Europe, a rate hike could follow in the summer if inflation stays elevated. Government bond yields rose further in several countries, reflecting investor unease about the medium-term inflation outlook.
Currencies and commodities
The Swiss franc appreciated modestly in April, once again benefiting from its safe-haven status in an environment of heightened uncertainty. Gold edged lower but remains at elevated levels and continues to be regarded by many investors as an important store of value. Oil prices remain well above pre-war levels despite the ceasefire, keeping energy costs high for households and businesses. Petrol in particular has risen sharply since the start of the year, weighing noticeably on household budgets in many countries. Bitcoin also posted a strong gain as risk appetite improved broadly.