April 18, 2026 Market Update

Market Recap. Stocks Surge, Bonds Not So Much

Stocks rallied last week, just weeks after flirting with correction territory. The rally was driven by hopes that a resolution of the U.S. and Iran conflict is on hand, along with strong corporate earnings reports. Five mega-cap tech stocks, Nvidia, Alphabet, Apple, Amazon, and Microsoft, have accounted for over 40% of the S&P’s recent gains.

The bond market, however, has not yet joined the rally. Yields have been relatively flat overall, with modest day-to-day moves, as fixed income investors weigh concerns about inflation, excess supply driven by deficit spending, and mixed economic data.

So which market will be correct? That remains to be seen. Stocks are pricing in improving conditions, while bonds continue to reflect a more cautious view on inflation and interest rates. When markets send conflicting signals like this, it often points to uncertainty rather than a clear direction. For now, the bond market’s hesitation suggests the outlook may not be as settled as some seem to believe.

Market Performance

Market Commentary: Earnings Off to a Fast Start

Corporate earnings are shaping up to be a bright spot this quarter. Current estimates point to S&P 500 earnings rising roughly 13% from a year ago, which would mark the sixth consecutive quarter of double-digit growth. If that holds, it would be the longest such streak since the post-financial crisis recovery.

Much of that strength reflects a corporate sector that has remained resilient despite higher interest rates and persistent cost pressures. Margins have held up better than many expected, and companies have continued to find ways to manage expenses while maintaining steady revenue growth. 

The more important question, however, is not what companies earned last quarter, but what they expect going forward. This is where the tone of earnings calls may matter more than the numbers themselves.

• If executives’ express confidence that demand remains strong and pricing power intact, this earnings season could reinforce the market’s recent optimism.

• If, instead, commentary turns more cautious, particularly around consumer spending or cost pressures, it may introduce a note of hesitation after an otherwise strong start to the year.

• If companies begin lowering or narrowing their full-year guidance, it could signal that management teams are becoming more cautious about the outlook despite strong recent results. 

With geopolitical risks still high and oil prices elevated, input costs remain a key variable. Whether companies can continue to pass those costs along without affecting demand will go a long way in determining whether earnings, and stock prices, can hold up throughout the rest of the year.

In Case You Missed It: That’s The Way The Ball Bounces.

In less than three weeks, the S&P 500 has recovered from a roughly 9% drop to all-time highs. The S&P has never fallen so far and recovered so fast before the latest bounce.