Stocks have enjoyed a strong month, with many indices reaching new highs. The ceasefire in the Middle East, combined with the White House's search for an exit strategy ahead of the mid-term elections in early November, has led investors to price in a slow, untidy end to the conflict.
The solutions may not be ideal, such as a fee to cross Hormuz, but they appear acceptable for markets. At the same time, earnings are looking solid, and the labour market remains resilient.
Another important factor is liquidity. Although the probability of further rate cuts has declined, the Federal Reserve has been buying around USD 40 billion of US Treasuries each month since December. In other words, liquidity remains abundant.
Equities regain momentum
Taken together, these factors have given stock markets the fuel they needed to rebound. The recovery has been particularly strong in countries that have limited exposure to the conflict. The US, which is largely self-sufficient in energy terms, rose by more than 10%.
The Americas performed well overall, especially Brazil and Mexico, helping to pull other markets higher. In Southern Europe, Italy and Spain led performance thanks to their exposure to financials and energy. Germany outperformed France and the UK, supported by its cyclical rebound.
Overall, Europe participated strongly in the global April rally, although it still lagged the US and Asia.
Asia was, in fact, the strongest-performing region globally in April 2026. The rally was led by North Asia (Korea, Taiwan and Japan) and was driven mainly by the AI and semiconductor cycle, alongside easing geopolitical risk and strong earnings momentum.
Bonds remain under pressure
Bond market performance was less impressive. Although interest rates have eased somewhat from their March highs, markets remain under stress. Investors continue to worry that the temporary inflation spike may last longer than expected, pushing inflation expectations higher.
Some markets, such as Norway, performed well, but many saw little change. The main loser was Japan, where the Bank of Japan chose not to tighten policy further, despite the yen remaining extremely weak.
Positive impact on advised strategies
Overall, this translated into a very positive month for the different strategies we advise. One example is the balanced strategy we publish:
This Optimize Invest Selection, a balanced fund composed of both equities and bonds, advised by Euroconsumers Invest during 2025. For more information about the fund characteristics, terms and conditions, and factsheet visit https://optimize.pt/en/investment-funds/invest-selection/