Financial stocks were the biggest gainers in the S&P 500 index in April as concern faded that an inverted yield curve would hurt banks' profitability and some of the largest U.S. lenders posted better-than-expected first-quarter earnings.

JPMorgan Chase & Co., Prudential PLC and Morgan Stanley recorded the biggest gains within the sector, of 15.5%, 15.1% and 15.0%, respectively. JPMorgan revenues jumped to a record $29.1 billion in the three months to March 31, while earnings per share of $2.65 comfortably beat expectations of $2.32. Morgan Stanley earned $1.39 per share, blowing past the $1.17 consensus.

The yield on 10-year Treasury notes was 2.51% on April 30, 8 basis points above 3-month bills, compared with a spread of 1 basis point a month earlier. The spread was negative between March 22 and March 28, sparking fears of a recession and concern for banks' profitability, which relies to a certain extend on their ability to borrow at the short end of the curve and lend at the longer end.

While banks remain at a “fairly heavy discount” to the broader market, future stock gains may be capped by rate concerns, said Baird analyst David George. “The valuation should provide some downside support. But at the same time, we think upside’s going to be fairly limited due to a challenging rate environment, being in the latter stages of the current economic cycle and [it is] unlikely for credit quality for the banks to get meaningfully better than it is.”

The Communication Services sector, which includes companies such as Facebook Inc. and Alphabet Inc., was the second-best performer, with a 6.5% gain, while the Information Technology sector, home to Apple Inc. and Microsoft Corp., rose by 6.4%.

At the other end of the scale, the Healthcare sector was the biggest faller, sliding 2.6% in April. Of the 62 healthcare companies on the S&P 500 at end April, only 22 reported positive returns in the month. Analysts at S&P Global Ratings said in a recent report that the healthcare sector's vulnerability to financial slowdown arrives from deteriorating ratings, comparatively higher leverage and greater industry disruption.

Biotech Regeneron Pharmaceuticals Inc. posted the biggest decline in the entire S&P 500 with a 16.4% loss, while analytical laboratory instrument and software company Waters Corp. was the third-biggest faller, with a 15.2% drop. On April 23, Waters reported a first-quarter earnings per share of $1.60, compared with analysts' projection of $1.72.

Real Estate stocks were 0.5% lower in the month, while Energy eked out a 0.1% gain and Utilities rose 0.9%.

Exxon Mobil Corp. slipped 0.6% in the month after reporting worse-than expected financial results on April 26. Chevron Corp. lost 2.5%. While the U.S. oil major posted better-than-expected first-quarter financial results, its share price was dragged down by a tussle with Occidental Petroleum Corp. over control of Anadarko Petroleum Corp.