A month that bears would rather forget
The bear was slaughtered in April.
With a bit of help from Wall Street and analysts caught up in their feelings about Trump, the market seemed to get its claws out in March. However, by April, it was gearing up for something unexpected. The S&P 500 surprised everyone by climbing 10.4%, marking its best month ever. Since that peculiar fall of 2020, optimism grew around retail reopenings and government spending, while a financial regulator appeared unwilling to intervene as stock prices soared, boosted by the rollout of coronavirus vaccines. The Nasdaq really outshone everything, jumping 15.3%, a remarkable feat not seen since the early days of the pandemic. Meanwhile, the Dow, the quieter family member in the index lineup, added 7.1% and flirted audaciously with the 50,000 mark in the final hours of the month.
All three locations are closed on Thursdays. record high price. The S&P managed to close above 7,200 for the first time—a figure that would have seemed almost absurd just six weeks prior, when the index hovered 9 percent below its January high, and analysts were rehearsing their recession warnings.
Bad news that didn’t touch my heart
Of course, there were plenty of elements that should have pushed the market down. A catalog of fears included things like the war in Iran, crude oil prices soaring past $100, and the Fed’s favored inflation gauges showing troubling signs driven by energy costs. Consumer spending showed signs of slowing down, and central banks—like the European Central Bank and the Bank of England—were frozen in uncertainty. Rising gas prices were becoming a serious concern for other parts of the economy.
Yet despite all that, the bears couldn’t quite take down the beast of the ongoing bull market.
I suppose there’s a certain satisfaction in witnessing this. In our March 4 newsletter, we advised: Panickers always lose money — PALM. The S&P has already climbed 34% since Emancipation Day in April 2025. I’ve pointed out often that this trend is reliable, even if people tend to ignore it. A disaster is announced, blame is placed, a sell-off starts, and then things just keep rolling on.
In April, once again, we saw things decline—it was A cruel month for bears suffering from TDS.
made in america
The surge in the market’s confidence was largely driven by advancements in artificial intelligence. Notably, this trend is American. Tariffs make it impractical to offshore AI infrastructure. Trump tax cuts and full depreciation rules have made domestic construction appealing for CFOs prioritizing cost-efficiency. Beyond just numbers, a sense of economic nationalism has emerged, making domestic architecture seem less like a regulatory burden and more of a competitive edge. The importance of reliable supply chains for national security and economic prosperity is being widely acknowledged.
The semiconductor sector saw incredible growth, rising 37% in April. The Magnificent Seven experienced over a 16 percent increase. Philadelphia Semiconductor Index hit an 18-session profit streak, a claim usually seen as exaggerated, yet it seems to be true in this case.
Escape from the server room with the caterpillar
Yet, perhaps the most intriguing story is around Caterpillar, that iconic yellow symbol of the material economy. The stock shot up nearly 10% one Thursday after reporting increased revenue due to demand for AI data centers and a raised forecast for the year. Year-to-date, it’s up 41%. With AI beginning to influence Caterpillar, it’s shedding its solely tech profile and becoming an industrial contender.
On the flip side, the financial results from major tech firms were as mixed as ever. Alphabet rose 10% on cloud service strength, while Microsoft and Meta took a hit due to investment worries. Nvidia, despite dropping 4.6% in one day, remains up a striking 83% over the past year. So, the decline might just indicate a market pause following a sprint. Investors are increasingly distinguishing between companies profiting from AI and those merely spending money without clear future returns.
PALM rules
As for the panic merchants who had meticulously linked distant events like wars and oil shocks to predict recessions and bear markets, they seem to have quieted down a bit. The S&P 500 rebounded from a 4.6% dip in the first quarter to close at an all-time high. Not surprisingly, no apologies have been given. Absolutely none.
But the market, true to form, made its decisions with a calmness typically seen in seasoned financial institutions that have weathered multiple panics. Once again, the outcome is PALM.
