MW Stocks clock their best month since 2020 as Wall Street shakes off Iran oil shock
By Joseph Adinolfi
The S&P 500 and Nasdaq composite just tallied their best month since 2020 as a big rally in semiconductors helped power major indexes higher
U.S. stocks just closed out another wild month.
U.S. stocks stormed higher in April, pushing the S&P 500 and Nasdaq composite to their biggest monthly gains in six years.
Over the past four weeks, investors demonstrated an optimism about corporate earnings growth that has taken the bears by surprise. Worries about dramatic declines in crude supplies and natural gas flowing through the Strait of Hormuz - a situation that remains unresolved - were quickly overshadowed by early indications that prices north of $4 for a gallon of gas haven't done much to dent consumer spending.
Meanwhile, money has continued to pour into the building of new data centers to power AI, helping to fuel a roaring rally in semiconductor stocks.
All of this has helped stocks stage what - by at least one measure - has been one of the fastest rebounds into record territory ever.
"It has been wild, to say the least," HB Wealth chief market strategist Gina Martin Adams said during an interview with MarketWatch on Thursday. "What I find most fascinating is just how, behaviorally, it seems the market is trying to trade the war just like it traded trade policy in 2025."
See: Stocks usually take the escalator up and the elevator down. In this latest rebound, it is happening in reverse.
The S&P 500 SPX gained 680.49 points, or 10.4%, to 7,209.01 in April, its best month since November 2020, according to Dow Jones Market Data. The Nasdaq composite COMP rose 3,301.68 points, or 15.3%, to finish at 24,892.31, its biggest gain since April 2020, as stocks were just beginning to recover from a painful selloff provoked by the advent of the COVID-19 pandemic.
The Dow Jones Industrial Average DJIA is up 3,310.63 points, or 7.1%, this month to 49,652.14, its biggest percentage-point gain since November 2024.
Tech steals the show
After a period of lackluster performance that began around Halloween, technology stocks staged a major comeback in April, stealing the show from energy stocks, which gave back some of their big gains from March.
The State Street SPDR Technology Select Sector exchange-traded fund XLK gained 20%, its biggest monthly increase since October 2002, when it rose 24.8%, according to Dow Jones Market Data.
This was largely due to the semiconductor trade. Red-hot memory stocks continued to rip higher, while even longtime laggards like Intel $(INTC)$ and Qualcomm $(QCOM)$ came back to life as Wall Street analysts ratcheted up their earnings forecasts. The PHLX Semiconductor Index SOX gained 38.4% in April, its best month since February 2000, according to Dow Jones Market Data.
Results from the companies that have reported so far, including Intel and Seagate Technology $(STX)$, have impressed the market.
"I think the rally in the market and the rally in tech is all driven by earnings revisions," Joseph Shaposhnik, founder and portfolio manager of the Rainwater Equity ETF RW, said during an interview with MarketWatch. "Over the past few weeks, we've seen analysts taking up their estimates for the full year and for the quarter, and that is what has driven much of the move in semis."
Even outside the U.S., technology names have done well, which has helped drive a big rebound in South Korean and Chinese indexes.
"To be fair, energy prices haven't moved too much, so it's understandable why energy stocks didn't continue to rally, and the momentum elsewhere drew money away from them even as oil was generally stable," said Steve Sosnick, chief strategist at Interactive Brokers.
Despite the latest market milestone, there were signs on Thursday that there could be more pain ahead for tech, particularly after the latest batch of Big Tech earnings.
Dispersion between the performance of Big Tech names like Alphabet $(GOOGL)$ - which rose by 10%, a huge gain for a trillion-dollar company - and Microsoft $(MSFT)$, Nvidia (NVDA) and Meta Platforms (META), which all declined, showed that investors were increasingly willing to pick winners in the AI race.
That could make it harder for major indexes like the S&P 500 SPX and the Nasdaq COMP to keep on climbing, HB Wealth's Martin Adams said.
A still-narrow rally
For a minute there, it looked like investors also were regaining an appetite for value stocks, small caps RUT and other laggards. But the market's comeback from the selloff inspired by the Iran conflict has been driven by a handful of megacap names.
Only 10 tech stocks have accounted for about 75% of the S&P 500's 12% advance since March 30, according to Charlie McElligott at Nomura.
Doug Kass, president of hedge fund Seabreeze Partners Management, pointed out that the number of S&P 500 stocks trading above their 50-day and 200-day moving averages has been declining, even as the index has hit new highs. This is a sign of what technical analysts call a "bearish divergence," Kass said in commentary shared with MarketWatch.
Lately, the stocks trading on the New York Stock Exchange and Nasdaq that have declined on a given day have outnumbered those that have risen, even as major indexes have moved further into record territory, as the chart below shows. Thursday, however, saw breadth abruptly improve after the latest batch of earnings from the megacaps.
Staying hedged
The earlier selloff caused by the Iran conflict was less severe than what investors witnessed in April 2025, when President Donald Trump's tariffs sent the S&P 500 skidding to the edge of bear-market territory.
While investors have been more reluctant to part with their stocks this time around, they have remained hedged. The put-call ratio for the Cboe Volatility Index VIX fell as low as 0.2 this week, the lowest in a year. That is a sign that investors have been favoring VIX calls, which would likely pay off in the event of a sudden selloff, over VIX puts, which represent a bet on a calmer market.
"People want to stay invested, but they also want to own some downside protection in this market, which I think is pretty normal after a shock event - particularly given that the shock is still ongoing," said HB Wealth's Martin Adams.
The VIX itself finished the day at 17, its lowest closing level since February, shortly before the U.S. and Israel began their bombardment of Iran.
-Joseph Adinolfi
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 30, 2026 16:55 ET (20:55 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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