Weekly Market Update for May 1, 2026

by Gavyn Jensen-Schneider, Research Associate

Relative quiet on the geopolitical front brought a renewed focus on the Federal Reserve Board, just in time for Jerome Powell’s last meeting as Fed Chair. The S&P 500 finished the week up +0.91%, while the Nasdaq grew +1.12%. The 10-Year Treasury yield, an interest rate indicator, closed at 4.37%, up +6 basis points (bps) from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, was unchanged at 3.70%.

The Federal Reserve Board held interest rates in the 3.50% – 3.75% range, as was widely expected. The Board, in describing its decision, continued to highlight the delicate balance between the employment and inflation ends of its dual mandate. Over the past six months or so, the unemployment rate has remained relatively low, hovering between 4.2% and 4.5%, but employment growth has stagnated with an average of 14.8k jobs added over the past six months. Monthly job additions during economically expansionary times usually measure between 175k and 200k. Simultaneous with the weak job growth, inflation has remained stubbornly ahead of target, hovering around 3% for close to a year, and will likely see a jump in the upcoming months as the ramifications of the Iran war and subsequent oil shock reverberate through the economy.

The Fed Board still maintains an easing bias in its policy statements, though the April meeting produced 4 dissents from the 12 voting members. Kashkari, Hammack and Logan—presidents of the Minneapolis, Cleveland and Dallas Fed branches—dissented due to the easing bias implicit in the policy statement. These “hawks” are concerned about the inflationary consequences of the Iran war and want the Fed to leave its policy options open rather than leaning toward rate cuts or hikes. On the other end of the “hawk-dove” spectrum is Governor Miran, who has consistently voted in favor of rate cuts since his appointment in September of last year. The “dovish” Governor dissented yet again in favor of a 25-bps cut to the policy rate in what was likely his last meeting as a board member; he is slated to be replaced by Fed Chair nominee Kevin Warsh once he is approved by the Senate.

Hyperscalers Alphabet, Amazon, Microsoft and Meta each reported their Q1 2026 earnings this week, to a variety of investor receptions. Google’s parent company, Alphabet, saw its stock pop after beating expectations nearly across the board, though the rapid +63% growth in Google Cloud services took the cake. Meta’s report was received with less enthusiasm as management increased capital expenditure estimates for 2026 in an effort to build out data center hardware. Amazon and Microsoft were received without much fanfare, as both companies seemingly met investor expectations for growth, particularly for cloud computing services.

With the hubbub surrounding the Fed meeting and hyperscaler earnings reports, economic data drops were easy to miss. The preliminary Q1 GDP reading came in at +2.0% y/y, 0.3% lower than analysts had expected, but remaining modestly positive. March PCE inflation jumped 0.7% from last month to 3.5%, reflecting increased fuel costs from the Iran war, while core PCE saw a smaller increase from 3.0% to 3.2%. PCE inflation data has a one-month lag compared to CPI data, but it is the preferred inflation gauge of the Federal Reserve as it’s thought to be a more accurate reading of inflation because it dynamically adjusts to account for changes in consumer behavior.

The first full week of May brings a slate of employment data: the March Job Openings and Labor Turnover Survey (JOLTS), April nonfarm payrolls, and the unemployment rate. The April employment statistics are the first since the onset of the Iran war, and analysts will be curious to see if the conflict is having any tangible impacts on the labor market. Earnings season will continue its fervor with a variety of consumer discretionary names including Block (XYZ), Shopify (SHOP) and Uber (UBER) reporting this week.