Markets in a Nutshell — for April 2026

Markets snapped back in April after the March rout. While the Iranian war settled into an uneasy ceasefire, the Strait of Hormuz — the narrow channel through which much of the world’s oil and gas normally moves — remained closed to seaborne traffic. Oil markets were volatile, but retraced in the month on hopes of a settlement and news that the United Arab Emirates would leave OPEC, weakening the cartel.

Surprisingly, the main US share market index shrugged off the effects of war. It rallied to record highs, led again by American technology shares and the productivity promise of artificial intelligence. Non-Chinese emerging markets also rose strongly, helped by Asian chipmakers that have become essential to an AI boom which, for all its digital promise, still depends on power, memory chips and data centres that cannot be supplied at software speed. 

There were valid reasons for this optimism. US corporate earnings remain buoyant, and America is less exposed than Europe or Asia to imported energy shortages. Investors in US share markets are paying up for profits, innovation and relative insulation.

Nevertheless, the recovery had a Pollyannaish air. Oil’s sharp month-end move down masked the fact that the physical energy market is under severe strain — ships, refineries and fuel stocks do not respond as quickly as commodity prices. Nor does inflation. By month-end, higher energy prices were already appearing in rising global inflation data, while growth slowed sharply in Europe. In an admission that the next step has become harder, the US Federal Reserve, the European Central Bank and the Bank of England all kept interest rates on hold. Higher-for-longer rates will add to the pressure on growth.

April was a reminder that prices change much faster than facts. Before the war, we found ourselves in a late-cycle global economy, with inflation trending lower and dominant markets buoyed by the AI theme and trading at extreme valuations. These facts are unchanged, but the IMF and OECD have both warned that a longer energy shock would mean weaker growth and higher inflation, the worst possible mix. Corporate profits and global growth may be casualties.

All the Foord funds participated in the market recovery. Understandably, the Foord global funds lagged peers with fuller weights to the US market exuberance. We remain invested in global equities, but selectively so. We have lower-than-market weights to the AI theme, especially to infrastructure plays, given risks to earnings and valuations. We prefer companies with forecastable cash profits, as well as balance sheets that can absorb higher input costs and that are trading at prices that do not require everything to go right. 

This leaves us less exposed to the crowded themes, be those the resources trade or US exceptionalism, and more willing to invest in compelling opportunities in Europe and Asia, where valuations offer better balance between risk and reward. The Foord portfolios reflect both balance and optionality for non-binary outcomes and a pipeline of exceptional businesses to which the world is not paying enough attention.