After a turbulent start to 2026, April delivered a stark reversal for equity markets. The S&P 500 Index had fallen 4.4% in the first quarter, weighed down by the onset of the Iran conflict, but the Index appeared to find its footing on March 30th and subsequently surged nearly 14% through the end of April. It was the best monthly return for the Index since November 2020. Broader market participation was equally impressive as the Russell Midcap Index rose 7.3% in April, while the small-cap Russell 2000 Index jumped 12.1%, indicating that the rally extended well beyond just large-cap leadership.
The durability of this recovery is notable given that the Iran conflict remains unresolved. Investors have, at least for now, taken their cue from President Trump's characterization of the situation as a "skirmish" — seemingly discounting the risk of meaningful escalation or a prolonged engagement. Whether this reflects sound judgment or a degree of complacency remains an open question, and one we will be monitoring closely as geopolitical developments unfold.
In addition to renewed investor optimism about Iran, also driving stocks higher were generally stellar 1Q earnings. Approximately 80% of S&P 500 companies surpassed earnings expectations, with corporate profit margins approaching record levels. Several mega-cap bellwether names not only beat on earnings but raised forward guidance, further emboldening investors who had grown cautious during the 1Q selloff . The confluence of these factors — fading Iran-related headwinds and a corporate earnings season that exceeded even optimistic forecasts — created a potent bullish backdrop propelling equities higher.
Although risk appetite rebounded swiftly in April, we believe a measured degree of caution remains appropriate. Elevated profit margins, while impressive, may face increasing pressure in the quarters ahead. Input costs remain sensitive to any renewed disruption in energy markets, an unfortunate reality given the ongoing situation in the Middle East.
At the same time, there are early indications that the US consumer may be losing some momentum. While overall spending has held up, pockets of softness are beginning to emerge. Credit conditions off er a clear signal: delinquencies have been steadily rising from pandemic-era lows, especially in credit cards and auto loans, and are now approaching levels that were last seen during the 2008 financial crisis. Compounding these challenges, the Fed has yet to signal a
clear pivot toward rate cuts. As a result, borrowing costs remain elevated, continuing to weigh on both corporate investment and consumer spending.
With the arrival of May, it’s that time again to revisit one of Wall Street's most enduring pieces of seasonal wisdom: "Sell in May and Go Away." The adage reflects a historically observed tendency for equity markets to deliver their weakest returns during the May through October calendar period.
As shown in the table above, since 1950, the S&P 500 has generated an average return of just 2.1% during the May-October period, making it by a considerable margin the weakest six-month stretch of the calendar year. In contrast, the best 6-month return has occurred during the other non-overlapping six month calendar period, November-April, delivering a generous 7.0% gain, a return that is more than three times greater than the May-October period return.
Seasonal headwinds facing the market over the next six months become even more pronounced when viewed through the lens of the presidential cycle. Of the four years that comprise the cycle, the midterm election year (2026, this year) has historically been the weakest, a period often characterized by political gridlock, policy uncertainty and shifting Congressional power dynamics that tend to unsettle markets and dampen investor confidence.
The chart above illustrates the average calendar-year return for the S&P 500 since 1931, broken out between midterm election years (blue line) and all other years (grey line). While the grey line, representing non-midterm years, climbs with relative steadiness from May through October, the blue line tells quite a different story. During midterm election years, the S&P 500 has tended to struggle during this six-month period, with the blue line flattening and retreating in a pattern that confirms the "Sell in May" adage.
When this cyclical vulnerability is layered on top of the already-unfavorable May-October seasonal time frame, the result is a compounding of two independent bearish forces, one rooted in the calendar, the other in the four-year electoral cycle. Together, they create a historically difficult environment for equity investors, and one that warrants a degree of caution as we move deeper into the months ahead. In light of this historically challenging window and given the lingering geopolitical unknowns, our investment thesis remains consistent. Within client portfolios, we maintain a defensively oriented position. We believe that at this stage of the cycle, being mindful and vigilant about preserving capital is just as vital as striving for relative performance gains.
If you have any questions regarding your portfolio or our outlook, please do not hesitate to call or email.
As always, the entire team at Measured Wealth wishes to thank you for entrusting us to deliver on your financial goals.
Ed Miller, CFA, CMT
Chief Investment Officer
Important Disclosures
Historical data is not a guarantee that any of the events described will occur or that any strategy will be successful. Past performance is not indicative of future results.
Returns citied above are from various sources including Factset, Bloomberg, Russell Associates, S&P Dow Jones, MSCI Inc., The St. Louis Federal Reserve and Y-Charts, Inc. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. Investing involves risks, including possible loss of principal. Please consider the investment objectives, risks, charges, and expenses of any security carefully before investing.
“ ’Magnificent 7’ is a market term and is being used for illustrative purposes only. The individual securities and related returns shown are presented solely for illustrative and informational purposes to demonstrate recent market trends. They are not intended to represent holdings in any Measured Wealth portfolio, nor do they represent investment recommendations or past or current performance of any Measured Wealth strategy. Measured Wealth may or may not hold any of the securities discussed.”
In order to provide effective management of your account, it is important that we have current information regarding your financial status and circumstances. Please contact us in writing at 303 Islington Street, Portsmouth, NH 03801 if you have any changes in your fi nancial situation or investment objectives, and whether you wish to impose any reasonable restrictions on the management of the account or reasonably modify existing restrictions.
Measured Wealth Private Client Group, LLC is an investment adviser located in Portsmouth, New Hampshire. Measured Wealth Private Client Group, LLC is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the fi rm by the Commission. Measured Wealth Private Client Group, LLC only transacts business in states in which it is properly registered or is excluded or exempted from registration.
This publication is provided to clients and prospective clients of Measured Wealth Private Client Group, LLC for general informational and educational purposes only. It does not: (i) consider any person's individual needs, objectives, or circumstances; (ii) contain a recommendation, off er, or solicitation to buy or sell securities, or to enter into an agreement for investment advisory services; or (iii) constitute investment advice on which any person should or may rely. Mention of any particular security in this publication, including reference to the performance of a particular security, is for illustrative purposes only. Clients of Measured Wealth may hold positions in the security, and Measured Wealth may buy or sell the security at any time. Past performance is no indication of future investment results. This publication is based on information obtained from third parties. While Measured Wealth Private Client Group, LLC seeks information from sources
it believes to be reliable, Measured Wealth Private Client Group, LLC has not verified, and cannot guarantee the accuracy, timeliness, or completeness, of the third-party information used in preparing this publication. The third-party information and this publication are provided on an “as is” basis without warranty.
This publication may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “should,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors aff ecting a portfolio's operations that could cause actual results to diff er materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may diff er materially from those refl ected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of Measured Wealth Private Client Group, LLC or any of its affi liates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made.
