April 2026 Market Wrap
Table of Contents
April 2026 Market Wrap
7 May 2026
Back on track
Global stock markets delivered one of their strongest monthly performances since 2020, with global markets surging almost 9% in April, reversing all of the losses experienced since the Iran war began and reaching new record highs. Markets have taken the view that the war will be over soon and the global economy can adjust to and absorb the supply shocks.
*Source: Factset: Kōura returns are pre-tax and post-fees. Returns over 12 months are annualised. Local market returns use the relevant markets indices; NZ Equities uses NZX50 index; US Equities uses S&P500 index; Rest of World uses MSCI EAFE Index; Emerging Markets uses MSCI Emerging Markets Index, Fixed Interest uses Bloomberg Aggregate NZ Composite Bond Index. Bitcoin return is the USD change in price of Bitcoin. The return for an Aggressive Portfolio represents the equivalent of 95% growth and 5% income assets investing in core Kōura Funds. The return for a Growth Portfolio represents the equivalent of 80% growth and 20% income assets by investing in core Kōura Funds. Returns are calculated by Kōura. Past performance is not a reliable indicator of future performance. Returns are not guaranteed, and investment values may fluctuate over time.
1. Are markets assessing the risk of Iran appropriately
The Strait of Hormuz remains closed, inflation is spiking across the globe, oil is above $120 per barrel, and diesel prices have more than doubled — yet markets continue to hit all-time highs.
The on-again/off-again negotiations between the US and Iran suggest that both parties are looking for a quick exit that would reopen the strait, but there is more to markets than oil prices.
A significant market downturn is generally caused by a recession, or a strong expectation that one is imminent. Economic data shows we are a long way from that point, and consumers are holding up well despite higher fuel costs. On top of that, companies continue to report blockbuster earnings, with 84% of companies that reported Q1 results in April beating expectations.
AI is also booming — more on that below — and this will continue to drive earnings and stocks higher.
You will take your own perspective on where markets currently sit. The big question is whether the economy can hold up and whether tech earnings continue to grow. Markets are currently betting on the good news — the question is how long that view can last.
2. AI is back on track
Since the release of Claude Code in February, AI demand has surged, with token usage doubling over the past six weeks. In 2025, markets were concerned about an oversupply of AI datacentre capacity — the concern now is that there isn't enough.
Shortages are appearing across the entire supply chain, making it increasingly difficult to bring on additional capacity. Many of the large AI providers are having to limit usage because they simply can't keep up with demand. This is likely to have a significant impact on pricing, which will support continued investment in the space.
Some of the biggest beneficiaries of the AI boom are South Korea and Taiwan, both of which delivered their best-ever monthly gains — 31% and 26% respectively — driven by chip and semiconductor manufacturers. We are once again in a severe semiconductor shortage, which will continue to drive earnings for these companies.
3. Interest rates continue to rise as inflation bites
Inflation continues to move higher. In the US and UK it is now touching north of 4%, which is pushing up interest rates. Central banks are currently talking about "looking through" the oil shock, but markets are sceptical that they will be able to hold that line.
Here in New Zealand, wholesale interest rates have risen by 0.6% over the past few weeks and mortgage rates are beginning to move up. Markets are now pricing in a 50% chance of an OCR increase at the June meeting.
4. New Zealand continues to get left behind
The New Zealand stock market ended the month flat — one of the few markets not to rise in April. As we have discussed for the past few years, the New Zealand stock market and economy are highly leveraged to interest rates. With rates now rising, it is hard to see a meaningful recovery in either the market or the broader economy any time soon.
5. The Bitcoin rally may have started
Bitcoin rose 12% in the month, closing at around $76,000 — proving once again that it closely follows risk sentiment and, in particular, the Nasdaq. The big question on everyone's mind is whether this recent rally marks the beginning of the next up-cycle, or whether it is simply a dead-cat bounce.
Gold fell 1.1% in the month, continuing to slip as inflation climbs and risk appetite returns.
Disclaimers:
*The views and opinions expressed in this article are those of Rupert Carlyon. This content is for informational purposes and should not be considered financial advice. Before making any financial decisions, consider consulting a financial adviser.
*Kōura Wealth Limited is the issuer and manager of the Kōura KiwiSaver Scheme. A copy of the Product Disclosure Statement is available at kourawealth.co.nz/documents
*Bitcoin is highly volatile and not suitable for all investors. Before investing part of your KiwiSaver balance in the Kōura Bitcoin Fund, ensure you fully understand the risks associated with cryptocurrencies: https://shorturl.at/U6Mkp, and/or consider seeking financial advice.