Market insights,
April 2026
Investing
5 min read
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Please note: All performance numbers referenced in this article are sourced via Morningstar, and are in NZ Dollar terms, unless stated otherwise.
April was a lively month for investors, with equity markets and key central banks seemingly looking through – at least for now – mounting oil price and inflation concerns stemming from the war in Iran.
Broadly speaking, trading conditions boded well for investors with globally diversified holdings. In contrast, any Kiwi investors pinning their hopes on domestic stocks will have likely had an unsatisfactory month.
Global equity markets showed their resilience
Despite the headwinds that continue to blow in from the Middle East, April ended with the S&P 500 – the signature US equity index – posting its biggest monthly gain (+7.04%) since 2020.
The uplift was powered by the return-to-favour of tech stocks and specifically, renewed optimism around the AI theme. Investors will now be watching the trend closely for signs of over-exuberance, and evidence that the tech hyper-scalers can come good on the colossal amounts of investment that they’ve so far attracted.
In parallel, investors in NZ stocks had little to cheer. The NZX50 Index closed down -0.07% for April. Year-to-date it’s down -4.76% (as at 30 April), while over 5 years, it’s only up +0.27%. The MSCI World Index, in comparison, gained +6.19% in April. It’s up +3.22% so far in 2026 (as at 30 April) and has posted +15.78% over 5 years.
While past performance is never a guarantee of future performance, it’s important to recognise that the risk of ‘home bias’ shouldn’t be underestimated by Kiwis. And neither should the value of staying invested when market conditions are bumpy.
Anyone who panic-sold out of markets during the outbreak of the US-Iran conflict, or who stayed on the sidelines waiting for a more psychologically comfortable time to invest, may now be ruing that decision.
Oil prices rose again
As impressive as the resilience of global equity markets may be, the ongoing US-Iran war means that large storm clouds continue to overhang the global economy.
The will-they-won’t-they dynamic surrounding a possible ceasefire agreement has added an unhelpful layer of uncertainty. Specifically, the shuttering of the Strait of Hormuz and Trump’s apparent willingness to play the long game, fuelled a renewed surge in oil prices. And as a result, inflation concerns rose.
Dashing hopes of a quick resolution, a spokesperson for the White House was quoted as saying that Trump had, “discussed the steps…. we could take to continue the current blockade for months if needed…[1]”.
Towards the end of the month, oil prices broke through the $120 USD a barrel mark, at one point hitting a 4-year high of $126.41 a barrel, before settling at $115.8[2] – a price that is still uncomfortably high with recession risk and inflation risk in mind.
The longer it sits above $100 USD, the more entrenched recession discussions may become in investment circles.
Central banks sat tight
Against that backdrop, four of the world’s key central banks – the Bank of Japan, the Bank of England, the US Federal Reserve (Fed) and the European Central Bank (ECB) – all held their respective monetary policy meetings in April.
Speculation was rife that interest rates would need to rise as a counter to the inflationary pressures that are starting to feed into the global economy. In the end, all four central banks kept their rates on hold, preferring to wait-and-see how deep and how sustained any inflation impact of higher oil prices could become. Policy makers continue to walk that fine line between wanting to support economic growth and employment, while also keeping a lid on price pressures.
The ECB left no doubt that the Iran war and constrained oil supply were taking a toll in the eurozone: “The incoming information suggests that the conflict is weighing on economic activity. Surveys point to slowing growth, and consumers and businesses have become less confident about the future since the war began. Longer delivery times and rising input prices suggest supply chains are coming under pressure… The Governing Council highlights the urgent need to strengthen the euro area economy while maintaining sound public finances. Fiscal responses to the energy price shock should be temporary, targeted and tailored. Reforms to enhance the euro area’s growth potential and accelerate the energy transition to reduce reliance on fossil fuels are more vital than ever[3].”
As ever, the Fed was heavily scrutinised across the month. There was added bite in April as it was Jerome Powell’s last FOMC session before he steps back from this role as Chair. In recent months, he has been in the firing line from Trump who has criticised his refusal to cut rates. Regardless of the external pressure, the Fed decided to hold its funds range at 3.5% to 3.75% for the third consecutive time[4].
Following the FOMC meeting, Powell declared that he wouldn’t be leaving the Fed entirely and will stay on the board of governors until the Department of Justice’s investigation into him was concluded[5].
A quick word on bonds
Given that these updates typically take their lead from equity markets, geopolitics, and news flow, it would be remiss of us not to mention debt markets.
While the fogginess around interest rate trajectories persists, the outlook for bond investors remains somewhat uncertain. At the time of writing, credit spreads are fairly tight (reflecting general exuberance) which means that investment-grade credit (corporate) bonds aren’t as attractive as they could be.
At present, longer-dated sovereign bonds appear to offer better value, and we are currently in the process of reviewing our allocations in this space. More information will follow in due course.
Sources and references
[1] Source: https://www.rnz.co.nz/news/world/593780/trump-urges-iran-to-sign-a-deal-and-discusses-prolonged-blockade
[2] Source: https://edition.cnn.com/2026/04/30/energy/oil-prices-iran-war-wartime-high-blockade-hnk
[4] Source: https://www.cnbc.com/2026/04/29/fed-interest-rate-decision-april-2026.html
[5] Source: https://www.bbc.com/news/live/cdxplw0k7e1t
Photo credit: Omar Ramadan for Unsplash