Week ended May 1, 2026: US stocks gain for fifth week running

It was an action-packed week for investors, with focus on four major central bank decisions and a slew of earnings, including earnings from five of the Mag 7 companies.  Geopolitically, as much as the Trump Administration wants to convince the world that the US is in control in the Persian Gulf, asset prices are saying it’s a stalemate at best with Iran controlling shipping into and out of the Strait of Hormuz.  The result this past week was skyrocketing oil prices (again), higher yields and jittery equity markets.  Nonetheless, U.S. stocks chalked up their fifth consecutive week of gains. 

• Global equities were range bound and mixed, with U.S. and Chinese stocks leading weekly gains.

• US equities drifted most of the week but were generally well supported by earnings, especially from the reporting Mag 7 companies (all beats, see further below).  On Friday, stocks added to their gains, sending all of the U.S. indices higher WoW.

• US Treasury yields inched higher 6bps to 10bps across the curve, as bonds got hammered again.  The short end felt the brunt of the increases as it has become clear that the Fed will not change its policy rate until there is more clarity on oil-price fuelled inflation.

• Corporate bonds followed US Treasury bonds lower, although credit spreads were more or less stable in both investment and non-investment grade.

• Focus was on oil prices, with post-war highs being reached intraweek.  WTI oil spiked but managed to claw back some of the weekly price rise on Friday, closing the week at $101.94/bbl (+8% WoW).   According to AAA, price-at-the-pump for regular gas was $4.39/gallon on Friday, up from $4.06/gallon one month ago and $3.19/gallon one year ago.  Reckon it’s Biden’s fault (ha ha).

• The US Dollar came under renewed pressure as foreign central banks all suggested a hawkish bias last week, meaning they are more likely to raise rates then lower them this year.  The Fed actually looks to be the most dovish (relatively speaking), sending the greenback lower.  The Japanese government apparently intervened in the foreign currency markets on Wednesday as the Yen weakened to ¥160/US$1.00.  The Yen then strengthened to close the week at ¥157.06/US$1.00.

• Gold was slightly weaker WoW, and Bitcoin was slightly better.

The table below is a summary of weekly and year-to-date performance of select indices and asset prices. You can find more detail in the Markets section at the end of this update.

Central bank decisions: The Fed, Bank of Japan, Bank of England and ECB

Important monetary policy decisions last week went down exactly as expected, as none of the major central banks changed their policy rates.  However, the devil is very much in the detail.  Both the BoJ and the FOMC had an unusual number of dissenting views, with a cadre of voting members in both committees taking on a more hawkish stance because of oil-induced inflation.

• With three members of the nine member monetary policy committee voting to raise the policy rate from 0.75% to 1.00%, the BoJ has likely set the stage for a rate rise at its next meeting in June even though it did not alter its policy at this meeting.  As with all central banks, inflation expectations have been revised higher and economic growth lower.  The BoJ press release is here.

• The FOMC (Fed) was the most divided since 1992, with four members (of the 12 member committee) voting against the statements in the FOMC decision.  Even though President Trump’s stooge Stephen Miran (yawn) voted to lower the policy rate 25bps, three other members voted to completely remove the easing bias in the outlook.    The FOMC decision is here.  It appears investors are expecting no change in the Federal Funds Rate either way during the remainder of 2026.

• The Bank of England was the most unified in some time, holding the Bank Rate steady just like its central bank peers.  Only one of the nine voting members of the committee voted to raise rates.  Andrew Bailey struck a “wait and see” attitude although he was clear that the BoE would have to address higher inflation going forward if prices were to remain elevated.  Keep in mind that the policy rate in the UK is the highest of any of the central banks discussed in this update, at 3.75%.  The press release and commentary is here.  

• The ECB also had a hawkish hold, maintaining its benchmark rate at 2% even as Ms Lagarde suggested that the ECB might need to raise rates in June should higher oil prices continue to put upward pressure on inflation.  The committee also highlighted the economic drag caused by higher oil prices.  The ECB press release is here.

Will he stay or will he go?

Ah, it’s so nice to have an adult in the room in terms of Jerome Powell, in contrast to the Trump Administration which is anything but.  With the DoJ more or less dropping its criminal investigation of Mr Powell, incoming chairman Kevin Warsh (Trump nominee) was approved along party lines by the Senate Banking Committee, opening the door for him to replace Chairman Powell on May 15^th.  Of course, the fact that the DoJ did not completely close the door on re-starting the investigation was enough reason for Mr Powell to say that he will remain a member of the FOMC after May 15, which he is perfectly entitled to do, in order to protect the Fed’s independence.  And assuming he remains on the Fed Board keeping a “low profile” (Powell’s words), Stephen Miran is out.  The tally is Powell 1, Trump 0.

Earnings

Let me make this personal – I was thrilled with earnings this past week, mainly because most of my portfolio companies more than delivered the goods, including GOOG, AMZN, MSFT, V, LLY, MO and CSCO.  The table below summaries results for five of the Mag 7 companies that reported last week and TSLA (reported the week before), including WoW price action for the week, month and YTD, and revised valuation stats. 

I consider US stocks elevated given the economic context, but it’s hard to argue that there has been stellar earnings this round, at least so far.  I was expecting some revisions down to guidance because of the effects of higher oil prices, but for the most part, companies outside those most directly affected by higher oil prices have revised guidance higher.  You can see in the graph from John Authers (Bloomberg Opinion) below that global earnings have simply been on fire.

U.S. stocks had their best month in years in April, in spite of the ongoing U.S. – Iran war.  You simply have to love the size, diversity and momentum of the U.S. economy, which even bad policy decisions can’t derail.  With GDP growth coming in at 2.0%/annum in the first quarter and PCE (both headline and core) for March registering over 3%/annum, the economy looks solid albeit inflation is heading in the wrong direction.  It is also clear that the U.S. is being splattered less than nearly every other country in the world because of a war that the U.S. started.  How very ironic.

The summary of earnings for S&P 500 companies for the quarter to date can be found here via FactSet Earnings Insight for the week ended May 1, 2026.

MARKET DATA AND TABLES

Below are tables of key indices and asset prices that have been updated for the past week.

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