Weekly Market Commentary: May 2, 2026

Index Performance

Major Themes

Big Tech Earnings Carry the Week

The earnings reports that defined this week all landed Wednesday evening, when Alphabet, Amazon, Meta, and Microsoft reported first-quarter results together. Alphabet was the clear standout. The company posted EPS of $5.11, up 82% year over year, on consolidated revenue of $109.9 billion. Google Cloud grew 63% to top $20 billion in quarterly revenue for the first time, and Alphabet raised its full-year capital expenditure guidance to as much as $190 billion. The stock surged roughly 10% on Thursday, pushing the S&P 500 to its first close above 7,200.

Meta's report was more mixed. Revenue and per-person monetization both beat estimates, and the company guided second-quarter revenue of $58 billion to $61 billion, roughly in line with expectations. Meta raised its full-year capital expenditure forecast to a range of $125 billion to $145 billion, up from a prior range of $115 billion to $135 billion, citing higher component costs tied to the Iran conflict and infrastructure buildout. Shares fell more than 5% in the session following the report. Amazon's cloud revenue increased 28% year over year to $37.59 billion, marking its fastest growth in more than three years, though both Microsoft and Amazon ended the week lower as investors weighed the rising capital spending commitments. Apple posted fiscal second-quarter revenue of $111.2 billion, up 17% year over year, with EPS of $2.01, both above consensus. Shares gained roughly 3% in after-hours trading and extended that gain Friday, helping the Nasdaq close above 25,000 for the first time.

GDP Rebounds, but the Inflation Reading Complicates the Picture

Thursday's data was a two-edged sword. The Bureau of Economic Analysis reported that real GDP grew at a 2.0% annualized rate in the first quarter, a sharp recovery from the near-stall of 0.5% in the fourth quarter of 2025. The PCE price index jumped to 4.5% for the quarter, and core PCE came in at 4.3%, each roughly double where the Federal Reserve would like them. The March monthly PCE report showed core prices up 0.3% for the month, putting the year-over-year rate at 3.2%.

The Federal Reserve voted 8 to 4 to hold the benchmark funds rate in a range of 3.50% to 3.75%, the most dissents since 1992. Three members objected to retaining the easing bias in the statement, and one preferred an immediate 25-basis-point cut. Chair Jerome Powell, in what is likely his final press conference as chair before Kevin Warsh assumes leadership, stressed that the committee wants to observe how the Iran conflict shapes inflation and growth before making any move. Treasury yields drifted higher through the week on the combination of firmer price data and the divided FOMC statement, with the 10-year note closing Friday at 4.39%, up 8 basis points from the prior Friday's close of 4.31%.

Oil Remains a Persistent Variable

West Texas Intermediate crude settled around $101.94 a barrel on Friday, down from midweek highs but still well above $100. The Iran conflict continues to restrict traffic through the Strait of Hormuz, keeping supply-side pressure in place. Oil touched higher intraday on escalation fears before pulling back on reports of informal diplomatic contact. The energy backdrop is threading through every major story: it is pushing inflation higher, complicating the Fed's path, and raising capital costs for AI data-center construction.

April, taken as a whole, was the S&P 500's strongest monthly performance since 2020, with the index gaining roughly 10% for the period, powered by a resilient earnings season. The Dow's monthly gain was its best since November 2024.

Looking Ahead

The April employment situation report is due Friday, May 8. March payrolls had recovered to 178,000 after a February contraction, and the labor market's ability to sustain that momentum under higher energy costs will matter to both the Fed's calculus and equity valuations. April CPI is also on the calendar this week, and will be watched closely for any sign that the brief ceasefire-related oil dip in mid-April moderated consumer prices before crude climbed again.

On the earnings front, Palantir reports Monday after the close, followed by Advanced Micro Devices and Shopify on Tuesday and Walt Disney and Arm on Wednesday. Of the 63% of S&P 500 members that have so far issued results, 84% have topped analysts' earnings expectations, according to FactSet. Any guidance commentary that connects AI infrastructure spending to tangible revenue or margin improvement will carry particular weight for a market that has, so far, chosen to reward the build-out thesis.

Past performance is not indicative of future results. All investing involves risk, including the potential loss of principal.