April brought a market narrative defined by two forces pulling in opposite directions: a geopolitical shock that rattled confidence early in the month, and an earnings-driven rebound that pushed the S&P 500 to new record highs by late April. The U.S.-Iran conflict, now in its eighth week, has kept oil near $100 per barrel, complicated the Fed’s path, and forced investors to reckon with a world where inflation risks are geopolitical as much as they are cyclical. Yet corporate fundamentals, particularly in AI and technology, have proven more resilient than many expected, and markets have shown a remarkable ability to look through near-term shocks toward longer-term earnings potential.

The market isn’t pricing reality. Growth is holding up, inflation isn’t falling fast enough, and an energy shock is pushing both in the wrong direction at the same time. This isn’t a soft landing—it’s a late-cycle regime shift. Markets are still behaving like disinflation is inevitable and rate cuts are coming, but the data and policymakers suggest a different outcome: higher-for-longer is back, driven by supply shocks rather than demand.