Markets Remain Resilient
May 4, 2026
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Despite the continued closure of the Strait of Hormuz, U.S. consumers have so far remained steady amid higher inflation pressures and rising gasoline prices. Recent results from Visa and Mastercard reinforced the view that household spending is holding up. Equities extended their rally, with the S&P 500 Index posting its fifth consecutive weekly gain—its longest streak since 2024.1 The S&P 500 Index and Nasdaq Composite Index rose 10% and 15%, respectively, in April.2 Investor positioning continues to reflect a two-sided backdrop: strong momentum in artificial intelligence (AI) and semiconductors versus the potential headwind from persistently higher energy prices.
The Federal Reserve (Fed) left its benchmark rate unchanged at 3.50% to 3.75% last week in an 8-to-4 vote, one of the most divided Federal Open Market Committee (FOMC) decisions since 1992.3 Minneapolis Fed President Neel Kashkari, Dallas Fed President Lorie Logan and Cleveland Fed President Beth Hammack dissented on the forward-guidance language, arguing the Committee should communicate that the next move could be either a cut or a hike. Kashkari also noted that a prolonged war-driven shock to prices could weigh on U.S. consumer spending.
Last week’s megacap tech earnings and the Fed meeting did little to shift the broader risk-on tone. Markets also responded positively to ongoing efforts to translate a fragile ceasefire into more durable stability, though those developments are being tested this morning. In credit, Meta tapped the investment-grade market for $25 billion in a deal reported to be roughly four times oversubscribed.4 The transaction keeps attention on the potential for additional large-scale issuance from hyperscalers as capital expenditure needs remain elevated, with the next wave of supply possible as soon as this week.
Treasury yields finished the week near the upper end of their recent range as crude oil hovered near a four-year high and incoming data continued to point to a resilient U.S. economy.5 The 30-year Treasury yield rose five basis points to 4.96% for the week ending May 1, its largest one-week increase since March 13, 2026.6 The 10-year yield ended the week at 4.37%.7 Rates markets appear to be pricing in the risk of second-round inflation effects from the move higher in energy prices.
Looking ahead, the April jobs report due Friday is expected to show a 65,000 increase in payrolls, firmer wage growth, a steady unemployment rate and a modest uptick in labor force participation.8 U.S. rates investors will also be watching this week’s Treasury Department borrowing announcement for the next three months, expected on Wednesday.9
Sources:
1The Wall Street Journal – S&P 500 Extends Longest Weekly Winning Streak Since Late 2024; 5/1/26
2,4,6-9Bloomberg
3CNBC – Fed holds rates steady but with highest level of dissent since 1992; 4/29/26
5Yahoo! Finance – Global oil price hits 4-year high on concern of US-Iran war escalation; 4/30/26
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