Markets Update April 2026 - Despite geopolitical risks: Markets are proving resilient

Market participants are increasingly focusing on a swift resolution to the Iran conflict and an easing of the associated energy shortages. As a result, stock markets have shown a positive trend again in recent weeks. While the conflict remains unresolved and the path to de-escalation follows the usual nonlinear logic—as evidenced by the shifting news reports surrounding the blockade of the Strait of Hormuz— However, open hostilities have, at least for the time being, given way to a phase of dialogue. Given that U.S. President Donald Trump is under domestic political pressure and is seeking a swift end to the conflict, market participants do not currently anticipate another significant escalation. Nor do troop movements and the transport of military equipment in the region point to an imminent expansion of hostilities.

The market structure has improved noticeably as a result: many major stock indices have resumed their upward trend and are trading near their all-time highs. Market breadth has widened significantly, with a greater number of stocks participating in the overall market’s positive trend. At the same time, both realized and expected volatility have declined noticeably—market jitters have thus eased significantly.

This raises the question of whether recent market developments merely reflect the pricing in of geopolitical risks—or whether there is more to it than that. Geopolitics has clearly dominated the headlines so far this year: The U.S. detained Venezuelan President Nicolás Maduro, threatened to annex Greenland, and repeatedly called NATO into question. Most recently, the war with Iran followed. However, it is often overlooked that corporate fundamentals are currently exceptionally robust.

A weak U.S. dollar provides additional tailwind

Analysts’ earnings estimates currently show unusually strong positive momentum. The trend in actual corporate earnings is keeping pace with this. Above all, the AI megatrend remains intact and is increasingly reflected in earnings data. Added to this is the weakness of the US dollar as an additional tailwind: The global stock market is largely dominated by large, internationally active US companies that benefit disproportionately from a depreciation of the US dollar.

Overall, market participants kept a close eye on these sound fundamentals, combined with valuation levels that had improved significantly in the meantime. Accordingly, buyers quickly regained the upper hand once geopolitical risks had peaked. From a tactical perspective, the current market environment points more toward a continuation of the upward trend than toward a sustained reversal.