Insights
Welcome to our monthly briefing, where we provide a comprehensive analysis of recent economic events and their implications for the financial markets. April’s commentary highlighted a resilient U.S. equity market, with stocks reaching new highs despite geopolitical tensions and persistent macro uncertainty.
Highlights from April’s Briefing:
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First-quarter 2026 earnings for the S&P 500 are tracking year-over-year growth of more than 27%, the strongest pace since late 2021. Corporate fundamentals remain healthy, with nine of eleven sectors reporting positive earnings growth and seven delivering double‑digit gains.
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Growth remains highly concentrated in technology and communication services. Information technology and communication services—together representing over 40% of the S&P 500’s market value—are driving the bulk of earnings growth, posting increases of roughly 50% or more. Excluding these two sectors, overall earnings growth would fall to just under 10%, underscoring ongoing concentration risk beneath headline results.
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April’s strong rebound more than offset March’s broad declines, with emerging markets and U.S. small caps leading returns. However, the weaker performance of the equal‑weighted S&P 500 relative to the cap‑weighted index suggests gains remained tilted toward a narrow group of large, AI‑exposed companies.
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Despite the war in Iran and elevated energy prices, equity markets remained comparatively calm. While the VIX spiked episodically, stock prices and energy equities showed limited sustained disruption, reinforcing the market’s tendency to discount short‑lived crises unless they materially affect earnings over time.
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The S&P 500’s advance year‑to‑date has been driven primarily by earnings growth rather than multiple expansion. With valuation levels largely unchanged, recent gains appear more fundamentally grounded than rallies fueled by sentiment alone.
Read the April 2026 Monthly Briefing for deeper insights from Chief Market Strategist Julie Biel, CFA
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This information is being provided by Kayne Anderson Rudnick Investment Management, LLC (“KAR”) for illustrative purposes only. Information in this article is not intended by KAR to be interpreted as investment advice, a recommendation or solicitation to purchase securities, or a recommendation of a particular course of action and has not been updated since the date listed on the correspondence, and KAR does not undertake to update the information presented. This information is based on KAR’s opinions at the time of publication of this material and are subject to change based on market activity. There is no guarantee that any forecasts made will come to pass. KAR makes no warranty as to the accuracy or reliability of the information contained herein. Past performance is no guarantee of future results.
