Weekly Market Commentary: May 9, 2026

Index Performance

Major Themes

Earnings Season Delivers, with Some Caveats

The week's standout report belonged to Advanced Micro Devices. AMD reported first-quarter revenue of $10.3 billion, up 38% year over year, exceeding analyst expectations of $9.89 billion. Non-GAAP earnings per share came in at $1.37, topping the consensus estimate of $1.25 by nearly 10%. For the second quarter, the company guided to approximately $11.2 billion in revenue, again ahead of expectations. The Data Center segment, which drove much of the upside, continues to benefit from accelerating demand for AI infrastructure.

Not every report landed as well. PayPal fell 10% after reporting better-than-expected earnings but issuing a downbeat outlook for the current quarter. Shopify fell 7% after reporting continued top-line growth but weaker-than-expected earnings. Pfizer rose 2.2% after beating Wall Street's first-quarter earnings and revenue forecasts and reaffirming its 2026 outlook, with revenue totaling $14.45 billion, up 5% from a year earlier. The broader picture for Q1 reporting season remains constructive: FactSet forecasts S&P 500 earnings grew 27.1% in Q1 2026, which would mark the highest earnings growth rate reported by the index since Q4 2021.

The Strait of Hormuz Keeps Markets on Edge

Geopolitical risk reasserted itself sharply on Monday. The Dow shed nearly 560 points, or 1.1%, and Brent crude surged nearly 6% to settle above $114 a barrel as the fragile ceasefire between the U.S. and Iran appeared to falter. Sentiment reversed course mid-week. Oil prices fell sharply after Axios reported that the U.S. and Iran were closing in on an agreement to bring an end to the conflict, sending the S&P 500 up 1.46% on Wednesday to a new record close. The optimism proved short-lived. Washington and Tehran accused each other of initiating attacks in the Strait of Hormuz, and Brent crude recovered to around $101 per barrel by Friday as investors weighed the possibility that the ceasefire could again unravel. Oil's week-long swings underscore a persistent inflation risk that the Federal Reserve cannot easily look past.

April Jobs Report Surprises to the Upside

Friday's labor market data gave equities a decisive push into the weekend. Nonfarm payrolls rose by 115,000 in April, down from a strong 185,000 in March but well above the 55,000 forecast. The unemployment rate held at 4.3%. Average hourly earnings increased 0.2% for the month and 3.6% on an annual basis, below respective estimates of 0.3% and 3.8%, a modest relief for investors watching wage inflation alongside energy prices. The combination of a better-than-feared headline number and softer wage growth was precisely what markets wanted to see, and both the S&P 500 and the Nasdaq closed at fresh all-time highs on the day.

Looking Ahead

The coming week carries significant weight for both monetary policy and inflation. April CPI is scheduled for release on Tuesday, May 12, followed by PPI data on Wednesday, May 13. With energy costs elevated due to ongoing Strait of Hormuz disruptions, any upside surprise in either print could force a reassessment of rate-cut timing. On the earnings front, Cisco is set to report its fiscal third-quarter results on Wednesday alongside international names including Alibaba.

The week also marks a pivotal transition at the Federal Reserve. The full Senate is expected to vote on Kevin Warsh's confirmation as Fed chair the week of May 11, which would allow him to be confirmed before Jerome Powell's term expires on May 15. Warsh would then take over at the central bank's June 16-17 FOMC meeting. Markets have been attentive to any signals about how a Warsh-led Fed might approach the current policy dilemma: a labor market that remains stable but an inflation backdrop complicated by elevated oil prices and an unresolved conflict in the Middle East.

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