The Markets – April 27, 2026
April 27, 2026
The Markets – May 11, 2026
May 11, 2026
The stock market rally continued.
April ended with the Standard & Poor’s 500 (S&P 500) and Nasdaq Composite Indexes at record-high levels, having delivered their best monthly returns since 2020, reported Connor Smith of Barron’s. In April, investors:
- Leaned into optimism, remaining hopeful for progress in the Middle East. Paul R. LaMonica of Barron’s reported, “Markets are looking beyond the Iran war to a year of healthy profits and stock gains. Investors in our latest Big Money poll share that sentiment. Despite the Middle East conflict and other hurdles facing the economy, more than 54 [percent] of Big Money participants said they had a bullish outlook for the next 12 months, up from 47 [percent] in our survey in October.”
- Embraced “pick-and-shovel” companies. During the gold rush, some of the most profitable businesses provided the tools gold miners needed. Today, pick-and-shovel companies provide semiconductor chips and other datacenter necessities. So, while concerns persist about the enormous amounts being spent on artificial intelligence, investors have enthusiastically embraced the beneficiaries of that spending, reported Smith.
- Focused on corporate earnings. Strong overall corporate earnings also drove stock prices higher. At the end of last week, 63 percent of S&P 500 companies had reported first quarter earnings. The blended net profit margin for the Index was 14.7 percent. If profits remain at this level, it will be the highest net profit margin reported since FactSet began tracking it in 2009, reported John Butters of FactSet.
Last week, major U.S. stock markets finished the week higher. Yields on many maturities of U.S. Treasuries moved higher over the week, as well.
S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
THE BOND MARKET WAS LESS OPTIMISTIC THAN THE STOCK MARKET. While stock markets rallied to new highs last week, the bond market moved in the other direction. In the United States, yields on Treasuries rose while prices fell. Jared Blikre of Yahoo! Finance reported:
“The U.S. 30-year Treasury yield…is back near the danger zone that has sent stocks tumbling before. That zone is roughly 5 [percent]…But this is not just a U.S. story. Global bonds have been under pressure, with yields rising across major markets as investors reassess inflation, central bank policy, and government debt supply.”
In the United States, inflation, central bank policy, and government spending were top of mind last week.
Inflation moved in the wrong direction, rising to a two-year high. In March, Americans spent significantly more on gasoline and energy, health care, cars and parts, and insurance. The personal consumption expenditures price (PCE) index, which is one of the Federal Reserve’s preferred measures of inflation, showed:
- Headline inflation rose to 3.5 percent annualized in March (from 2.8 percent annualized in February).
- Core inflation, which excludes volatile food and energy prices, rose to 3.2 percent annualized in March (from 3.0 percent annualized in February).
The Fed left rates unchanged. The Federal Open Market Committee (FOMC), which is the Federal Reserve’s (Fed’s) rate-setting body, kept the range for the federal funds rate at 3.5 percent to 3.75 percent. The accompanying statement confirmed that:
- Economic growth is steady,
- Employment gains have remained low, on average,
- Inflation remains above the Fed’s 2 percent target, and
- Conflict in the Middle East has created a high level of economic uncertainty.
There was dissent among committee members. “Four officials voted against the decision, including three who objected to language in their post-meeting statement that suggested the central bank would eventually resume cutting rates,” reported Catarina Saraiva of Bloomberg. The possibility of a rate hike surprised markets, and yields on shorter-term Treasuries increased.
Government spending lifted economic growth. Usually, consumer spending is the primary driver of economic growth in the United States. Last quarter, consumer spending cooled and economic growth was driven by business investment and government spending.
While improving economic growth is wonderful, higher government spending is less so. Last week, Fitch Ratings warned that the U.S. deficit and debt are far larger than those of other countries with an AA rating. Fitch reported, “The fiscal position [of the United States] will deteriorate in 2026 due to tax cuts in the One Big Beautiful Bill Act (OBBBA), although tariff revenues will offset half the OBBBA’s fiscal impact.”
Taken together, last week’s data painted a complex picture for investors. Rising stock markets, higher inflation, a divided Fed, and a cautious bond market serve as important reminders to stay diversified and maintain a long-term perspective in uncertain times.
WEEKLY FOCUS – THINK ABOUT IT
“He that can have patience can have what he will.”
― Benjamin Franklin, Poor Richard’s Almanack
Warm regards,
Daniel J. Murphy, CFP®
Murphy Wealth Management Group
60 Merritt Blvd., Suite 106
Fishkill, NY 12524
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The Markets – October 12, 2026
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