Throughout April, if you had only looked at news headlines surrounding current events in the Middle East and elsewhere, you likely would have assumed that markets would be doing poorly. Yet the reality of market returns offers a stark contrast, boasting one of the most significant market rallies in recent times, recovering all losses from March and hitting new all-time highs.
Source: Bloomberg Finance L.P. Data as of April 22, 2026. Note: Iran conflict (2026) is a 9.1% decline.
After only eleven trading sessions, the S&P 500 had made a complete recovery from a nearly 10% downturn, representing the fastest such recovery in recent times. However, there is still no resolution in Iran, and the Strait of Hormuz, even once fully reopened, will face a considerable backlog. Thus, at face value alone, it might appear that the recent rally is unfounded.
However, strong market fundamentals remain key elements of this rally. While there are numerous factors at play in driving this most recent market recovery, one of the most important is the robust revenue and earnings of American companies. Notably, of the roughly 25% of the S&P 500 that have reported, around 83% have beaten their earnings estimates. This exceeds the five-year average of 78%.
This volatile period has demonstrated a crucial lesson for all investors on the importance of staying invested. Missing those eleven recovery days would lead to lasting lower portfolio values. Ultimately, the fundamentals remain the same: disciplined investing and sticking to the plan rather than reacting to headlines.