Stocks Snap Back, the Lead Narrows

Trend: from below the line to a record in one month. The S&P 500Glossary: An index of 500 large US companies, weighted by how much each is worth. When someone says “the market” without naming anything, this is usually what they mean. rose 10.4% in April to a record close of 7,209, its best month since November 2020, and is up 5.3% for the year. It ended March 1.7% below its 200-day averageGlossary: The average closing price over a set number of recent days, recalculated every day. It smooths out day-to-day noise to show the underlying trend. and April 7.2% above it, and it set its first record close since January on April 15. The gains ran across sizes and regions: the Nasdaq 100Glossary: An index of the 100 largest non-financial companies listed on the Nasdaq exchange. It leans hard toward technology, so it moves further than the S&P 500 in both directions. rose 15.6%, its best month since October 2002, the Russell 2000Glossary: An index of about 2,000 smaller US companies. Smaller firms borrow at floating rates more often, so this index reacts quickly when interest rates move. 12.2%, emerging markets (EEMGlossary: The iShares MSCI Emerging Markets ETF, which holds large and mid-sized companies in developing economies such as Taiwan, China, India, South Korea and Brazil.) 12.7% and developed international stocks (EFA) 5.3%. Inside the S&P 500, the average stock gained 6.0%, a little over half the index's gain (see below).

VolatilityGlossary: How far and how fast a price swings over a period, whether up or down.: the index calmed, its stocks didn't. The VIXGlossary: An index built from S&P 500 option prices that estimates how far the index is expected to swing over the next 30 days. Higher means traders are paying up for protection., the market's headline fear gauge, peaked at 25.8 on April 7, hours before the ceasefire was announced, and ended the month at 16.9, down from 25.3, its largest monthly drop since November 2024. Under 20 reads calm and above 25 stressed. The Cboe's single-stock volatility index (VIXEQGlossary: The Cboe S&P 500 Constituent Volatility Index: the average expected 30-day swing of the individual stocks in the S&P 500, read from their options prices.), which averages the expected swings of the index's members, barely moved: it slipped from 42.2 to 40.7 and made its April high of 44.5 on April 27. Part of that is the calendar: April 27 opened the week in which Microsoft, Alphabet, Meta and Amazon reported, and single-stock options price in big one-day moves like Intel's 24% jump on April 24. At month-end it stood at 2.4 times the VIX, up from 1.7 times at the end of March. The chart below shows the two, with credit spreadsGlossary: The extra interest companies pay to borrow compared with the government. It widens when lenders get nervous. on the second tab.