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TD Wealth Market Insights: April 2026 Snapshot

Source: Morningstar, TD Wealth Chief Investment Office. Indices used include the Bloomberg US Treasury TR Index, Bloomberg US Aggregate Bond TR Index, Bloomberg US Corp Bond TR Index, Bloomberg US Treasury US TIPS TR Index, Bloomberg Municipal TR Index, Bloomberg US MBS Float Adjusted TR, S&P 500 TR Index, Russell 1000 Growth TR Index, Russell 1000 Value TR Index, Russell 2000 TR Index, MSCI EAFE NR Index, and the MSCI EM NR Index. All performance is in U.S. dollars. Past performance is not indicative of future results. The indices are a tool to compare the performance of one or more indices. The volatility and performance of the indices may be greater than or less than the volatility and performance of actual investments. Indices reflect the reinvestment of dividends and income. Indices do not have fees, expenses or taxes, which would lower performance. Indices are unmanaged and not available for direct investment.

Market Brief Commentary – April 2026

  • 1

    What a Difference a Month Makes: After a volatile start to the year, financial markets rebounded sharply in April as a Middle East ceasefire agreement and record corporate earnings growth sparked investor optimism. The S&P 500 Index resumed upward momentum, posting its best monthly performance since 2020 and ending April at a fresh all-time high, lifted by technology gains. Strength in equities was broad-based including double-digit returns for both emerging market equities and U.S. small-cap companies. Fixed income also moved broadly higher, with municipal bonds delivering a solid monthly advance. While uncertainty remains around geopolitical risks and energy prices, we believe the experience of recent months serves as an important reminder to investors that time in the market can be more important than trying to time the market.

  • 2

    Strait Talk on Energy and Inflation: Investors welcomed the announcement of a ceasefire and de-escalation of the U.S.-Iran conflict in early April. However, for energy markets, the real focal point was the Strait of Hormuz—a narrow but critical shipping lane through which roughly 30% of the world’s seaborne oil flows. Ongoing geopolitical risks and restricted access have kept oil and natural gas prices elevated. Higher energy costs are adding to inflation pressures and could spill over into broader goods and services in the coming months. With the labor market holding up, we believe the Federal Reserve has the flexibility to remain patient, setting a higher bar for further rate cuts.

  • 3

    Earnings Momentum Builds: The first half of Q1 earnings season delivered encouraging results, with companies posting strong growth rates and positive revisions. Mega cap technology led the way, supported by continued strength in AI related demand and elevated investment in data infrastructure, even as questions linger around long term returns on rising capital expenditures. Elsewhere, consumer spending proved resilient and industrial activity continued to improve. Bank earnings were mixed but broadly stable, with firms downplaying risks tied to private credit. Overall, earnings trends reinforced confidence in corporate fundamentals despite a higher rate environment.

TD Wealth Asset Allocation Views – April 2026

  • Equity – Modest Overweight

    • Following a strong 2025, global equity markets have been volatile in recent months as the market grapples with the uncertainty surrounding the conflict in Iran.
    • While the extent of disruption to energy markets, and the time it may take them to recover remains uncertain, equity markets overall continue to be supported by positive global economic and earnings growth, as well as more pro-business government policies.

  • Fixed Income – Modest Underweight

    • The Federal Reserve has moved incrementally more neutral on monetary policy as heightened geopolitical tensions persist.
    • We expect global bonds, including U.S. bonds, to be influenced by developments in commodity markets in the near term, keeping bond yields, and income, elevated over the next 12 to 18 months.

  • Cash & Equivalents - Neutral

    • Cash rates are expected to ease as short-term rates fall over the next 18 months, but declines should be gradual.

TD Economics Key Financial Forecasts

Q1 2026

Q2F 2026

Q3F 2026

Q4F 2026

Q1F 2027

Q2F 2027

Q3F 2027

Q4F 2027

Fed Funds Target Rate

3.75

3.75

3.75

3.25

3.25

3.25

3.25

3.25

2-yr Govt. Bond Yield

3.79

3.70

3.40

3.35

3.35

3.35

3.35

3.35

10-yr Govt. Bond Yield

4.30

4.30

4.15

4.10

4.10

4.10

4.10

4.10

30-yr Govt. Bond Yield

4.88

4.90

4.70

4.60

4.60

4.60

4.60

4.60

Forecast by TD Economics as of May 2026; all forecasts are end-of-period. Source: FactSet, Federal Reserve Board, TD Economics.

SECURITIES AND INVESTMENTS

NOT A DEPOSIT

NOT FDIC-INSURED

NOT BANK GUARANTEED

MAY LOSE VALUE
SECURITIES AND INVESTMENTS
NOT A DEPOSIT NOT FDIC-INSURED
NOT BANK GUARANTEED MAY LOSE VALUE

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