April stocks face three headwinds after worst Q1 since 2022
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- S&P 500 fell 4.6% in Q1 2026, its worst first quarter since 2022, dragged down by concerns about AI disruption and uncertainty surrounding the Iran conflict.
- April has historically delivered the S&P 500's second-best monthly performance based on data back to 1928 (per Dow Jones Market Data), and the three major indexes posted their biggest weekly gains of 2026 as the month opened.
- Ameriprise's Russell Price projects March CPI — due Friday — will rise 0.9% month-over-month and 3.3% year-over-year, while the ISM prices-paid component for March already hit its highest level since mid-2022.
- BofA Global Research expects the Fed's preferred PCE inflation gauge to peak at around 4% in Q2 before falling next year, even as the U.S. economy added 178,000 jobs in March with unemployment dipping to 4.3%.
- Fed-funds futures traders price a 72.7% chance the Federal Reserve holds rates steady at its December meeting — a sharp reversal from late 2025, when markets priced in up to four rate cuts by end-2026.
- FactSet's John Butters reports S&P 500 2026 EPS estimates stood at $320 on March 31, up 4.1% year-over-year, but warns that Q1 earnings optimism is heavily concentrated in the information-technology sector.
- Empower's Marta Norton identified "Iran, Iran, Iran" as the market's single biggest concern, saying the conflict could simultaneously derail softer inflation, prospects for Fed easing, and corporate earnings confidence.
Why it matters: The market faces a rare convergence of negative signals: the S&P 500 just shed 4.6% in Q1, Ameriprise projects March CPI at 3.3% year-over-year, and Fed-funds futures flipped from pricing four 2026 cuts to a 72.7% probability of no cuts at all — meaning investors hoping April's seasonal tailwind delivers a rebound are instead running into hotter prices, a frozen rate path, and earnings growth concentrated in a tech sector increasingly vulnerable to AI-disruption fears.
