Wall Street Had Its Best Month Since 2020

The S&P 500 closed at 7,165 on 24 April 2026, then extended its record to 7,209 on 30 April, closing April as the benchmark's best calendar month since November 2020. The Nasdaq had its best April since 2020 as well. The Dow's monthly gain was its largest since November 2024.

The context for this remarkable run matters. The US market fell nearly 10% from its January all-time high when the US-Israel air campaign against Iran began in late February 2026, triggering the Strait of Hormuz closure and an energy price shock that briefly sent Brent crude above $110 per barrel. That 10% drawdown qualified as a correction by the conventional Wall Street definition. The subsequent recovery from the correction low took only 11 trading sessions, one of the fastest rebounds from a correction of that depth in modern market history. J.P. Morgan noted that recovery times from major corrections have been shortening across successive events, attributed to greater market liquidity, evolved trading structures, and faster policy response.

What drove the recovery is the more interesting part. It was not primarily a geopolitical de-escalation. The ceasefire announced on 8 April was temporary, and by late April, the Strait of Hormuz was still not fully reopened. Markets were recovering despite the conflict remaining unresolved. The driver was corporate earnings. With approximately 25% of S&P 500 companies having reported Q1 2026 results, roughly 83% beat earnings expectations, meaningfully above the five-year average of 78%. Revenue growth was on track for its strongest year-over-year comparison since 2022. Caterpillar surged nearly 10% in a single session on its AI data centre earnings beat. Alphabet gained 10% on its Q1 beat. The fundamental anchor held even while geopolitical risk remained elevated.

The emerging market story: more nuanced than conventional wisdom suggests

The conventional view is that when the US surges, emerging markets get left behind as the dollar strengthens and capital flows to safer US assets. In the period from 30 March to 22 April 2026, emerging markets as measured by the MSCI EM index actually led global performance with a gain of 13.8%, compared to the S&P 500's 12.5%, Europe's 6.6%, and Japan's 5.7%. The weakening US dollar, which fell 10% in 2025 and remains structurally overvalued according to Morningstar, has been a meaningful tailwind for emerging market currencies and assets, including the rand.

The JSE's performance during this same period has been more complicated. The All Share Index hit an all-time high of approximately 129,339 in February 2026, before the conflict began. Since then it has retreated to trading in the 114,000 to 118,500 range, roughly 10% below that February peak. April 2026 was reported as one of the worst months for South African shares in nearly two decades, despite the JSE's total market capitalisation crossing R8.17 trillion. This disconnect reflects the specific composition of the JSE: the index is heavily weighted toward resources and commodity stocks that suffered during the oil shock and stronger-dollar environment, even as financial and consumer stocks held up better.

The rand reached above R17.00 to the dollar during the worst of the conflict-related dollar strength, then recovered toward R16.30 to R16.56 as the ceasefire news emerged and oil prices pulled back.

The rotation thesis: when does it actually happen?

The J.P. Morgan data showing emerging markets outperforming the US from late March to late April 2026 suggests the rotation has been partially underway. SA-focused investors with positions in rand-hedged global equities through vehicles like Naspers (NPN) or Prosus (PRX) have benefited from the dollar weakness that accompanied this rotation. Foord Asset Management had increased its South African equity exposure to above 60% of its portfolio entering 2026, a meaningful overweight that reflected their view that domestic stocks were trading at unwarranted discounts despite stable underlying earnings.

Morningstar's 2026 global outlook identified South Africa as a "hidden gem" following the JSE's 42% dollar-terms return in 2025. That return reflected genuine re-rating of the domestic market as load-shedding eased and the GNU governance arrangement showed early signs of policy stability. The question for 2026 is whether that re-rating can continue given the Strait of Hormuz oil shock, SARB rate decisions, and commodity price volatility.

The rotation thesis is real but not guaranteed by any specific timeline. What drives emerging market outperformance is typically a weakening dollar combined with global risk appetite. Both of those conditions have been present in parts of April 2026. Whether they persist depends on whether the Iran conflict resolves, whether the SARB has room to cut rates further as inflation moderates, and whether commodity prices stabilise at levels that support JSE resource stocks without punishing the rand through the import inflation channel.

The specific JSE opportunities worth considering

After one of the JSE's worst calendar months in two decades, the pool of discounted SA assets is wider than it has been in some time. Banks have shown relative resilience: Standard Bank, FirstRand, and Capitec all held up better in April than the resource-heavy Top 40. Sasol surged dramatically on higher oil prices. As the conflict resolves and oil prices normalise, Sasol's Q2 2026 earnings will reflect the benefit of elevated prices during the disruption period, while the stock may retrace some of its extraordinary gains.

The macro setup that supports JSE outperformance from here includes SA inflation running at multi-decade lows, two SARB rate cuts already delivered, gold prices at record levels supporting gold miners, and the structurally undervalued rand beginning to recover. None of these guarantees near-term JSE gains. But they represent the kind of foundation that tends to produce meaningful returns for investors with a 12 to 24 month horizon who are willing to tolerate the volatility that comes with an exchange this sensitive to global commodity prices and geopolitical events.

Investor Takeaway

Wall Street's record-setting April happened for fundamental reasons: corporate earnings beat, AI infrastructure spending is accelerating, and one of the fastest correction recoveries in decades reflects deep institutional conviction in US equities. Emerging markets, including South Africa, actually outperformed the US in the critical recovery window from late March to late April 2026. The JSE's April underperformance relative to this trend reflects its commodity composition and rand sensitivity rather than a fundamental deterioration. For investors watching for rotation opportunities, the JSE's roughly 10% discount to its February all-time high, combined with strong domestic fundamentals in banking and consumer staples, represents exactly the kind of environment where the exchange tends to produce above-average returns for patient capital.