May 3, 2023

The US stock market advanced in April with the S&P 500 gaining 1.6%. Performance was mostly range bound with both positive developments and hard landing concerns. Some positive themes from earnings season included better than feared results from regional banks and mega cap technology stocks. The consumer also remains resilient with healthy household spending and only a moderate softening in labor markets. On the other hand, market breadth remains weak and equity leadership is too narrow. Financial conditions will continue to tighten following the banking sector turmoil in addition to the Federal Reserve’s anticipated 25 basis point hike this week.

Communication Services (+3.8%) and Consumer Staples (+3.6%) were the best S&P sectors, while Industrials (-1.2%) and Consumer Discretionary (-1.0%) were the worst performing sectors.  From a style perspective, value performed better than growth in the large- and mid-cap spaces, while small growth was better than small value.  From a market-cap perspective, large-cap stocks outperformed mid- and small-cap equities.