April 2026 saw a sharp improvement in investor sentiment as a ceasefire in the Middle East helped restore risk appetite, supporting a broad rebound in global markets despite lingering energy and geopolitical risks.
Global equities rallied strongly, with the US, Korea and Taiwan outperforming as technology, semiconductors and AI-related sectors drove gains, while energy prices remained an important source of pressure across regions.
Major central banks kept rates unchanged but maintained a hawkish, data-dependent stance, as inflation stayed above target and policymakers balanced sticky price pressures against a still-uncertain growth outlook.
April 2026 marked a sharp rebound in global markets as easing geopolitical tensions, following a ceasefire in the Middle East, helped restore risk appetite. While oil prices remained elevated and inflation pressures persisted, sentiment improved materially compared with March. Equity markets rallied strongly, led by technology and AI‑related sectors, while central banks held rates steady but maintained a cautious, data‑dependent stance. Inflation remained above target across major regions, and although growth held up in parts of the global economy, risks tied to energy prices and geopolitical uncertainty continued to shape the outlook.
European equities rebounded strongly, supported by resilience in technology and industrial sectors despite continued geopolitical uncertainty and elevated energy prices. Inflation rose further above target to 3.0%, while economic growth slowed to 0.1% in Q1, reflecting the drag from higher energy costs. The ECB kept rates unchanged at 2% but signalled a potential move higher, maintaining a hawkish bias as risks linked to the Middle East conflict intensified.
UK equities rose but underperformed global peers given the market’s lower exposure to technology. The Bank of England held rates at 3.75% while signalling a more hawkish outlook, with inflation expected to rise above 3.5%. Growth data was mixed - monthly GDP surprised to the upside, but forecasts were revised lower due to the impact of elevated energy prices. Consumer confidence weakened and labour market data softened, highlighting ongoing pressure on household sentiment.
US equities delivered strong returns and outperformed globally, with the S&P 500 and Nasdaq reaching record highs. Gains were driven by large‑cap technology and semiconductor stocks, supported by AI‑related demand and solid earnings. The Federal Reserve held rates steady but revealed increased internal division, reinforcing expectations that rates may remain higher for longer. Inflation rose, though underlying pressures were more contained, while labour market data strengthened and economic growth remained moderate.
Asia Pacific markets rallied sharply as improved geopolitical sentiment boosted investor confidence. Performance was led by Korea and Taiwan, where AI‑driven semiconductor demand drove significant gains. Japan also advanced, though policy tightening concerns persisted. China delivered mixed returns amid subdued domestic demand, while energy‑importing economies such as India and Indonesia lagged due to higher oil prices and currency pressures.
Emerging markets moved higher, supported by improving sentiment and strong performance in Asian technology-heavy markets. Korea and Taiwan led gains, while Latin America saw mixed performance as early strength faded amid rising inflation risks. Fuel‑importing economies remained under pressure from elevated energy costs and capital outflows, while Middle Eastern markets stabilised but remained sensitive to oil price dynamics and shipping disruptions.
Government bond markets came under pressure amid renewed inflation concerns, with yields rising to multi‑year highs in several regions. Central banks across the US, UK and eurozone held rates unchanged but maintained cautious, hawkish tones. Corporate bonds performed more positively, supported by tightening credit spreads, with high yield outperforming investment grade. Despite growth risks, credit markets remained resilient, with strong demand supporting issuance and overall returns.
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