April stock advance: Markets reflect resiliency

When the Iran war started two months ago, many investors reversed their once-bright outlook for markets: The American Association of Individual Investors Bulls minus Bears survey fell from +15 at the start of the year to -21 by March 20.¹Yet April turned out to be the best month of the entire five-plus year market advance, with the S&P 500 Index rising 10.49%.² That’s a pattern that has defined this entire stretch for stocks, a steady climb accompanied by persistent doubt.

In recent years, investors have been forced to assess whether specific events would stall the market’s advance. In 2022, it was the Russia-Ukraine war. In 2023, the failure of Silicon Valley Bank triggered fears of a broader financial crisis. In 2025, tariffs dominated headlines and raised concerns about growth and inflation. In 2026, the Iran war became the focal point of anxiety. And yet here we are again. The US stock market closed the month at record highs³ and credit spreads hovered near historic tights.⁴

What matters most for long-term results?

The common thread through these episodes isn’t that the risks were imaginary. Each was real and, at the time, meaningful. The mistake many investors may have made was allowing those risks to become the primary lens through which they viewed markets. In doing so, they may have overlooked what ultimately matters most for long-term returns. Are businesses delivering results, and are earnings growing?

Take the focus on the Strait of Hormuz as a recent example. It’s entirely reasonable to worry about disruptions in global energy supply. Oil prices can rise quickly. Inflation expectations can become unanchored. Central banks may be forced to reassess the pace and direction of policy. That makes for compelling headlines and endless debate. But at the end of the day, markets are generally claims on future cash flows. The critical question is whether companies are generating revenues, protecting margins, and allocating capital effectively.

Earnings season illustrates corporate resiliency

What has stood out repeatedly is the resilience of corporate America. That resilience isn’t accidental. Last week’s earnings season underscored that point. Roughly 80% of companies reporting results exceeded expectations.⁵ S&P 500 earnings growth has been running 15% to 16% ahead of last year’s level.⁶ Corporate profit margins have been near record levels, reflecting resilient demand and operating leverage.⁷ These don’t seem to be the statistics of an economy or a corporate sector on the brink. They seem to be the hallmarks of businesses that continue to execute despite an uncertain backdrop.

Markets have tended to follow earnings over time.⁸ When profits rise, stock prices usually do as well. When earnings are resilient, valuations may remain elevated without necessarily becoming unstable. Investors who positioned defensively based solely on macro fears often found themselves underexposed to this reality.

Keeping perspective amid risks

Looking ahead, it’s reasonable to expect that the geopolitical landscape will remain noisy. Risks rarely disappear entirely. They evolve and rotate. A year from now, my suspicion is that the worst of the Iran war will be in the rearview mirror, while the underlying businesses that make up the market will still be able to deliver growth. Importantly, that’s not a blind assumption. It’s broadly consistent with the guidance companies themselves are offering.

For investors, the takeaway isn’t to ignore risks or dismiss headlines outright. It’s to keep perspective. Spending hours immersed in the 24-hour news cycle can distort priorities and amplify fear. Taking a few minutes to listen to earnings calls and read company guidance may help provide insight into where markets may be headed.

Remarkable runs in stocks have rarely been driven by the absence of problems. They have been driven by the ability of businesses to perform despite them. This cycle has been no different.