April 25, 2026 Market Update

Market Recap: Don’t Worry, Be Happy

Equity markets were buoyed this week by a flurry of positive Q1 earnings reports that outpaced analyst expectations. By the close of trading on Friday, the S&P 500 recovered much of its early week dip, suggesting that investors are currently prioritizing domestic growth over geopolitical tensions.

In the bond market, the theme of higher for longer remains entrenched as inflation concerns resurface alongside volatile energy prices. Despite these headwinds, the traditional flight to safety into government bonds has remained muted, as traders appear more focused on the strength of corporate profits than on hedging against equity volatility.

Looking ahead, the market's refusal to surrender its recent gains in the face of uncertainty is a significant signal. The preference for growth and cyclical stocks remains intact, with concerns about rising energy prices and massive AI related spending seemingly set aside, for now. Positive earnings surprises are proving to be a powerful anchor for the equity market. But that anchor could give way if prices continue to rise.

Market Performance

Market Commentary: Hanging Tough

The stock market has been remarkably resilient as of late, despite the ongoing Iran conflict and the resulting jump in energy, fertilizer and petrochemical prices. The longer the conflict drags on, the more likely it will significantly harm the world’s major economies. Nonetheless, markets appear increasingly willing to look past near-term geopolitical and inflationary risks, focusing instead on the promise of artificial intelligence.

Mr. Market, it seems, is of the opinion that AI-driven advancements will prove very disinflationary.

AI has the potential to lower costs, support margins, and sustain economic growth even in a higher interest rate environment.

This optimism is most evident within technology and other sectors most directly tied to AI adoption.

That narrative is supporting higher equity valuations.

However, how and when those gains materialize remains uncertain, particularly as significant investment in infrastructure, energy, and hardware continues to drive costs higher.

For now, optimism around AI and resilient economic data continues to outweigh concerns tied to geopolitics and inflation. Whether that balance holds will likely depend on the pace at which anticipated productivity gains begin to materialize, what will it mean for employment, and consumer demand if they do?

In Case You Missed It: Fill ‘Er Up?

Jet fuel prices have more than doubled since the start of the Iran conflict, pushing the cost of filling a jumbo jet from roughly $150,000 to over $300,000 at current prices. It could take months for fuel prices to get back to normalize.