Monthly Review and Outlook April 2026
Global equity markets rebounded in April, with investor sentiment improving despite ongoing geopolitical tensions in the Middle East. While energy supply disruptions persisted and oil prices remained elevated, markets increasingly took comfort from resilient corporate earnings and structural growth themes. This supported a recovery in risk appetite across regions, alongside improved performance in technology and cyclical sectors.
Below is a review of key developments across global markets and our outlook for the months ahead, highlighting both opportunities and areas to watch.
Company shares
Global equity markets delivered positive returns in April, reversing some of the weakness seen earlier in the year. Gains were supported by stronger earnings momentum, renewed interest in technology-related growth themes and a perception that geopolitical risks, while elevated, would remain contained.
- United States: US equities rose strongly over the month, led by large-cap technology and communication services stocks. Continued momentum in artificial intelligence-related investment and a robust earnings season underpinned gains, although returns remained relatively concentrated among a small group of mega-cap companies. Broader market participation improved, but investor focus remained on earnings quality and balance sheet strength.
- Europe: Eurozone equities advanced, supported by stabilising economic data and resilient corporate earnings. Cyclical sectors such as industrials and financials were among the strongest performers. However, upside was more measured given the region’s sensitivity to elevated energy prices and uneven growth trends across member states.
- United Kingdom: UK equities also delivered positive returns, although performance was uneven. Strength in banks, industrials and technology hardware was partially offset by weakness in energy and healthcare. Notably, oil and gas producers declined despite elevated crude prices, highlighting a rotation away from defensive energy exposure towards more cyclical areas of the market.
- Japan: Japanese equities rebounded following March’s decline, supported by improved global risk appetite and renewed interest in AI-related companies. A more hawkish tone from the Bank of Japan provided additional support to financials, while currency stability also helped sentiment.
- Emerging Markets: Emerging market equities recovered sharply and outperformed developed markets. Gains were led by technology-oriented markets such as Taiwan and South Korea, as investors judged that supply chain disruptions linked to geopolitical tensions would be contained. Broader sentiment towards EM assets improved as risk appetite recovered.
Bonds
Fixed income markets remained volatile during April, reflecting shifting expectations around geopolitics, inflation and central bank policy.
- Government bond yields initially declined on optimism around potential ceasefire developments in the Middle East. However, yields moved higher as negotiations stalled and attention returned to stagflation risks and the persistence of inflation.
- The US Federal Reserve, European Central Bank and Bank of England all held interest rates steady, reinforcing a cautious approach amid elevated uncertainty and mixed economic signals.
- Eurozone government bonds remained particularly sensitive to energy market developments.
- UK gilts were among the weaker performers over the month, with yields rising to multi-year highs as markets reassessed the path of domestic inflation and policy.
Credit markets proved relatively resilient. Investment grade spreads tightened, supporting positive returns, while high yield bonds outperformed, helped by improved risk sentiment and steady fundamentals.
Commodities
Commodity markets remained elevated in April.
- Oil prices were volatile amid ongoing supply disruptions and geopolitical uncertainty, but remained high overall.
- Industrial metals were supported by structural demand themes, including electrification and infrastructure investment, as well as renewed optimism around global growth.
Outlook
Looking ahead, we expect market conditions to remain sensitive to geopolitical developments, energy prices and incoming economic data. While April’s equity market rebound reflects confidence in corporate earnings and longer-term growth themes, inflation risks linked to elevated energy prices persist.
Central banks are likely to continue proceeding cautiously, balancing the need to ensure inflation is durably under control against signs of moderating economic momentum. Volatility may persist as markets reassess the timing and extent of potential policy easing later in the year.
As ever, diversification across asset classes, regions and sectors remains important. Periods of uncertainty can present short-term challenges, but they also reinforce the value of maintaining a long-term investment perspective and a well-balanced portfolio.
Asset overview
Our general view of assets in the coming months is summarised as follows. These are our in‑house views as at the end of April 2026.
| Asset | RAG Status | Details |
|---|---|---|
Equities | Green | We continue to hold a positive view on equities but we’ve taken a more focused approach by moving away from the broader market and putting more emphasis on larger companies in the US. This is because they are generally less affected by rising energy costs. |
Government bonds | Red | We retain a cautious view on government bonds reflecting our view of above consensus growth and fewer Federal Reserve rate cuts than the market expects. |
Corporate bonds | Amber | We continue to adopt a cautious stance on corporate bonds as current returns offer little protection if economic conditions worsen. |
Commodities | Green | We have increased exposure to commodities by investing in agriculture, where rising fertiliser costs haven’t yet been fully reflected in prices. The existing investment in gold has been retained. |
Source: Schroder Investment Management and Lloyds Wealth, 13 May 2026.
RAG status legend:
Green - Positive outlook
Red - Negative outlook
Amber - Neutral outlook
Important information
Forecasts of future performance are not a reliable guide to actual results, neither is past performance a reliable indicator of future results. The value of investments and the income from them can fall as well as rise and are not guaranteed, and the investor might not get back their initial investment.
Any views expressed are our in‑house views as at end‑April 2026. Investment markets and conditions can change rapidly, and the views expressed should not be taken as statements of fact nor relied upon when making investment decisions. This content may not be used, copied, quoted, circulated or otherwise disclosed (in whole or in part) without our prior written consent.
Schroders Investment Management (SIM) provides investment management and advice services for Lloyds Wealth
funds and portfolios respectively.
Claims may be protected by the Financial Services Compensation Scheme. We are covered by the Financial Ombudsman Service.
Lloyds Wealth (ACD) is a trading name of Lloyds Wealth Management (ACD) Limited. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 11722973. Authorised and regulated by the Financial Conduct Authority number 834833.
