Weekly Market Update, May 4th, 2026

May 4, 2026

Earnings Matter-AI Capex Leads

Key Takeaways Last Week

U.S. stocks finished higher for the fifth straight week. The S&P 500 rose +0.9%, the Dow rose +0.5%, the Nasdaq rose +1.1%, and the Russell 2000 rose +0.9% for the week ending Friday, May 1, 2026. Year to date, the S&P 500 is up +5.6%, the Dow is up +3.0%, the Nasdaq is up +8.1%, and the Russell 2000 is up +13.3%.

  • The S&P 500 and Nasdaq closed at new record highs, with the Nasdaq above 25,000 for the first time.
  • Apple earnings and continued AI spending supported the technology and growth rally.
  • Oil remained volatile as U.S.–Iran talks stalled and Strait of Hormuz disruptions persisted.
  • Core PCE inflation remained elevated near 3.2%, keeping the Fed cautious and the board split.
  • Market leadership remained concentrated in AI, semiconductors, and data infrastructure.

U.S. Stock Performance – Index and Sector Moves

Financial markets improved during the week ending 5/1/26 (data from Seeking Alpha)

Seeking Alpha table.

 

Financial markets improved during the week ending 5/1. The S&P 500 rose +0.9% to 7,230. The Dow rose +0.5% to 49,499. The Nasdaq gained +1.1% to 25,114, and the Russell 2000 rose +0.9% to 2,812.  Year to date, the S&P 500 is up +5.6%; the Dow +3.0%; the Nasdaq +8.1%; and the Russell 2000 +13.3%.

Sector leadership was driven by technology, semiconductors, AI infrastructure, and data storage, while consumer segments were mixed due to rising fuel costs and softer sentiment.  Micro caps continue to lead YTD returns along with the Momentum price factor.

US Equity Sectors table.

Source:  Seeking Alpha

S&P 500 Weekly Leaders and Laggards Ranked (best available weekly % change ordering):

Top Performers (WTD):

  • Centene (CNC), +27.7% – Earnings beat + raised guidance (Medicaid strength)
  • NXP Semi (NXPI), +21.8% – Strong auto/industrial demand + AI tailwinds
  • Seagate (STX), +21.3% – AI-driven storage demand + margin expansion
  • Intel (INTC), +19.2% – Continued AI-driven momentum post earnings
  • Quanta Services (PWR), +17.8% – Power/grid demand tied to AI infrastructure

Bottom Performers (WTD):

  • Dollar Tree (DLTR), -5.9% – Consumer pressure + weak discretionary demand
  • Corning (GLW), -4.7% – Soft forward outlook despite AI exposure
  • Teradyne (TER), -4.6% – Weak guidance despite strong prior results
  • Mosaic (MOS), -4.1% – Commodity weakness; fluid energy prices
  • Paramount (PARA), -3.9% – Media pressure

US Equity Factors table.

Source: Seeking Alpha

Breadth & Participation

Market breadth improved modestly but remains muted beneath headline index strength. The equal-weight S&P 500 continues to lag the cap-weighted index.  While the index reached new highs, participation across sectors remains uneven. Stock picking remains key.

Advance/decline trends showed more advancing stocks than decliners for the week. This suggests improving but still incomplete participation. New highs vs. new lows also reflect a divergence. While new highs expanded modestly, they remain skewed toward technology, semiconductors, and infrastructure companies, with fewer defensive sectors participating. Overall, the market continues to be driven by a growth leadership group, which can increase vulnerability if leadership rotates or weakens.

International/Global

International markets were mixed as investors weighed strong U.S. equity momentum against geopolitical risks and oil volatility. Global markets remain sensitive to Strait of Hormuz developments, as disruptions could significantly impact global oil supply, inflation, and trade flows.

Volatility & Risk Sentiment

Risk sentiment remained constructive, supported by strong earnings and “calmer” Middle East events. However, sentiment remains fragile given: Oil volatility, Geopolitical uncertainty, and Narrowing market leadership

VIX: 17 with the forward curve steepening to 21 into summer.
MOVE Index: 72

Bonds, Credit & Interest Rates

Treasury yields ended the week higher but in recent ranges. The 2-year Treasury yield ended near 3.88%, the 10-year near 4.36%, and the 30-year near 4.91%. The 2s/10s curve remained inverted. Credit conditions are stable, though private credit, geopolitical risk, and oil-driven inflation remain key watch items.

Economic Data, Monetary Policy & Earnings

Economic data was secondary to earnings. The week’s key data included Q1 GDP and PCE inflation.

GDP grew near 2.0%, while core PCE rose to ~3.2%, indicating persistent inflation pressures. Labor markets remained resilient with jobless claims near cycle lows.

The Federal Reserve remains data dependent, balancing sticky inflation against stable growth.

Earnings remained the primary driver of markets, with strong results from AI, semiconductors, and infrastructure-related companies.

Per the most recent FactSet data: For Q1 2026 (with 63% of S&P 500 companies reporting actual results), 84% of S&P 500 companies have reported a positive EPS surprise and 81% of S&P 500 companies reported a positive revenue surprise. Earnings growth for Q1 2026 shows the blended (year-over-year) earnings growth rate for the S&P 500 is 27.1%. It will mark the highest earnings growth rate reported by the index since Q4 2021 (32.0%).  Ten sectors are reporting higher earnings today (compared to March 31) due to positive EPS surprises and upward revisions to EPS estimates. At the company level, the EPS surprises reported by Alphabet, Amazon.com, and Meta Platforms were the largest contributors to the increase in the earnings growth rate for the S&P 500 for 1st quarter. These three companies accounted for 71% of the increase in earnings for the S&P 500.

Consumer Stress Commentary

Signs of consumer pressure continue with gasoline prices remaining elevated due to geopolitical risk and oil volatility, acting as a tax on lower-income consumers. Credit-card delinquencies have been trending higher, particularly among subprime borrowers, suggesting stress in lower-income segments. Retail traffic and discretionary spending have softened, especially in non-essential goods. This suggests that while higher-income consumers remain resilient, lower-income consumers are increasingly under pressure.

Commodities, Currencies & Macro Assets

Oil remained volatile because of U.S.-Iran uncertainty and Strait of Hormuz risk. WTI / Brent weekly closed near $102/$108/bbl

Gold closed at $4625/oz.

The Dollar Index / DXY was near 98.8 during the week.

Bitcoin ended near $78,000, while Ethereum traded near $2,350.

Commodities table.

Source: Seeking Alpha

Liquidity Conditions

Equity liquidity conditions remained supportive for large-cap technology and semiconductor shares. Treasury liquidity appeared stable.

Flows & Positioning

The market posted its fifth straight positive week for the S&P 500 and Nasdaq. Positioning continued to favor AI, semiconductors, and mega-cap technology, while weaker earnings punished cable, defense, and select consumer names.

What Matters This Week

Markets will focus on:
· Continued AI earnings and capex commentary
· Oil prices and Middle East developments
· Market breadth improvement
· Consumer health trends

Bottom Line

Markets held near record highs for another week, led by technology and semiconductor strength. Markets continue higher, supported by strong earnings and AI-driven growth.

Stock Talk

Keep Your Eyes on the Prize: Earnings

Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.