AE Wealth Management: Weekly Market Insights | 4/26/26-5/2/26
Weekly Market Commentary
THE WEEK IN REVIEW: April 26 – May 2, 2026
Navigating the Strait of the Market
The Iran situation continues to fester, but the markets are looking ahead. For the moment, it appears the forecast is blockading with a chance of bombing. The U.S. has settled on the strategy of blockading Iran into submission while reserving the option to start bombing operations. That’s a threat Iran can’t ignore.
Oil prices continue to be elevated at more than $100 per barrel, and the national average for a gallon of regular gas is creeping up on $4.50.2,3 All that is driven by the uncertainty of whether Iran can damage seagoing oil traffic. Companies that own tankers loaded with oil worth hundreds of millions of dollars (and their shipping insurers) are naturally hesitant to take the risk through the Strait of Hormuz. This creates a bit of a standoff; Iran is being choked off from its main source of revenue, while the threat of an Iranian attack on shipping in the Strait of Hormuz is bottling up the rest of the region. If Iran attacks shipping, it is almost certain the U.S. will consider that a violation of the ceasefire and restart the bombing campaign.
That’s a lot of background, but it’s important to stay on top of the situation to understand why the markets are moving the way they are. Markets believe the worst of the Iranian conflict is behind us. The S&P 500 and Nasdaq both posted new records last week, and the Dow is encroaching upon 50,000 again.4,5,6
April was the best month for the S&P 500 since November 2020 (when the Covid vaccine was announced), up over 10%.7 Earnings have been strong. First-quarter GDP came in at 2%, stronger than the fourth quarter of 2025 but less than the forecasted 2.3%.8
Higher inflation, which was expected from tariffs and the Iran conflict, so far hasn’t been worse than predicted. That’s not to say inflation won’t continue to creep up as the conflict continues, but for now the markets are not expecting a prolonged conflict nor a robust response from Iran. As a result, markets continue to rally despite oil prices at $100+ per barrel, because they know the end is near and it will be full steam ahead.
Powell steps off the stage but doesn’t leave the room
Let’s get the basics out of the way before we get to the palace intrigue. First, the Federal Reserve concluded its April meeting by leaving interest rates where they were.9 The potential of higher inflation due to the Iran conflict and higher energy prices as well as tariffs were cited as the reason to hold rates where they are.
The April Fed meeting was likely the last time we will see Jerome Powell at the podium as Fed chair, since the Kevin Warsh nomination appears on track for confirmation and there is no Fed meeting in May.10
Now let’s get to the subtext. Powell acknowledged he fully expected to be replaced as Fed chair, but instead of resigning from the Fed entirely when he is replaced, he said he would serve out his term as a Fed governor.11 That means President Donald Trump will not be able to name a replacement, presumably one who would be more amenable to the president’s point of view. Powell can potentially remain a thorn in Trump’s side by consistently voting against his wishes and also influencing others, with whom he has developed personal relationships, to behave the same.
So ex-chair Powell will become Fed Governor Powell and potentially run an opposition Fed, which will make for a lot more fun and interesting Fed meetings (if these meetings can ever be fun and interesting). However, this new dynamic will provide less certainty and predictability for markets. In a way, Powell — who professed his independence throughout his term as Fed chair — is taking a partisan stand by remaining at the Fed because of his dislike of Trump. In the past, when one was done as Fed chair, they would move on or retire. Again, intelligence and decorum do not always cohabitate.
The other bit of drama from the Fed meeting was that there were four dissenters to keeping rates steady. Three favored rate hikes (predictable given the potential for higher inflation due to elevated oil prices). One called for rate cuts, although in fairness, Stephen Miran has called for cuts at every meeting since being appointed.
The Fed appears to be on the same path as many of our institutions: division and dissent. That shouldn’t be a surprise anymore, given the state of things today. Why would we expect any different from the Fed?
Coming this week
- It will be another quiet Monday to start the week. Now that the Fed meeting has concluded, we’ll be seeing a lot of Fed speakers stepping up to the mic.
- It’s the first full week of the month, which means it’s jobs week! Tuesday starts off with the Job Openings and Labor Turnover Summary (JOLTS) reading for March, since this number lags by one month. The February reading showed 6.9 million openings.12
- The jobs data continues on Wednesday with the ADP employment report. We’ll also get MBA mortgage applications.
- Thursday will feature more jobs data with weekly jobless claims, U.S. productivity, construction spending and credit.
- Friday is the biggest day of the week for jobs data, with the Bureau of Labor Statistics (BLS) monthly employment situation. The monthly nonfarm payroll reading last month was a decent +178,000, and we need to see continued strength on that front.13 Also included in that report will be wage growth, which was 3.5% last month. With inflation creeping up, that wage growth number is worth paying attention to.
- Friday will also include the monthly consumer sentiment reading plus a massive Fed panel on Friday night with five Fed speakers.
- Earnings roll on.14 For the first quarter of 2026, 63% of S&P 500 companies have reported actual results. So far, 84% of the companies have reported positive earnings per share (EPS) and 81% have reported positive revenue. Earnings growth for Q1 is 27.1%; if that number holds, it will mark the highest earnings growth for the index since the fourth quarter of 2021.
- Finally, for the current quarter, 28 S&P 500 companies have issued negative EPS guidance, and 23 have issued positive. Valuation is still historically high for the S&P 500, with the forward 12-month price-to-earnings (P/E) ratio at 20.9 vs. 22.2 last quarter, down mostly due to the stock market’s performance in March driven by the turmoil in the Middle East. Although the P/E ratio is a littler higher than the 5-year (19.9) and 10-year (18.9) averages, P/E will likely jump again next quarter due to the market’s recovery since the March lows.15
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500® | 0.91% | 5.62% | 29.01% | 20.16% | 11.58% |
| NASDAQ | 1.12% | 7.04% | 41.80% | 27.17% | 12.46% |
| DJIA | 0.55% | 2.99% | 21.46% | 13.28% | 7.88% |
Interest Rates: | |||||
| 5/1/2026 | 4/24/2026 | ||||
| UST 10 YR Government Bond Yield | 4.37% | 4.31% | |||
| Germany 10 YR | 3.03% | 3.00% | |||
| Japan 10 YR | 2.51% | 2.44% | |||
| 30 YR Mortgage | 6.38% | 6.30% | |||
| Oil | $101.94/ppb | $94.40/ppb | |||
| Regular Gas | $4.45/ppg | $4.10/ppg | |||
| All data as of May 1, 2026. | |||||
Sources:
1 Trading Economics. “Iran GDP.” https://tradingeconomics.com/iran/gdp. Accessed May 3, 2026.
2 Business insider. “Oil (WTI).” https://markets.businessinsider.com/commodities/oil-price?type=wti. Accessed May 3, 2026.
3 AAA. “Fuel Prices.” https://gasprices.aaa.com/. Accessed May 3, 2026.
4 Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC/. Accessed May 3, 2026.
5 Yahoo! Finance. “NASDAQ Composite (ˆIXIC).” https://finance.yahoo.com/quote/%5EIXIC/. Accessed May 3, 2026.
6 Yahoo! Finance. “Dow Jones Industrial Average (ˆDJI).” https://finance.yahoo.com/quote/%5EDJI/. Accessed May 3, 2026.
7 Jared Blikre. Yahoo! Finance. May 1, 2026. “The stock market just had its best month since the pandemic rebound: Chart of the Day.” https://finance.yahoo.com/markets/article/the-stock-market-just-had-its-best-month-since-the-pandemic-rebound-chart-of-the-day-100000062.html. Accessed May 3, 2026.
8 Bureau of Economic Analysis. April 30, 2026. “GDP (Advance Estimate), 1st Quarter 2026.” https://www.bea.gov/news/2026/gdp-advance-estimate-1st-quarter-2026. Accessed May 3, 2026.
9 Jeff Cox. CNBC. April 29, 2026. “Fed holds rates steady but with highest level of dissent since 1992.” https://www.cnbc.com/2026/04/29/fed-interest-rate-decision-april-2026.html. Accessed May 3, 2026.
10 Kevin Breuninger. CNBC. April 29, 2026. “Trump Fed pick Kevin Warsh clears key Senate hurdle, teeing up final vote.” https://www.cnbc.com/2026/04/29/trump-fed-nominee-kevin-warsh-senate-approval.html. Accessed May 3, 2026.
11 Scott Horsley. NPR. April 29, 2026. “Jerome Powell to remain on Fed’s board after stepping down as chair.” https://www.npr.org/2026/04/29/nx-s1-5802911/federal-reserve-meeting-jerome-powell-kevin-warsh. Accessed May 3, 2026.
12 Bureau of Labor Statistics. March 31, 2026. “Job Openings and Labor Turnover — February 2026.” https://www.bls.gov/news.release/pdf/jolts.pdf. Accessed May 3, 2026.
13 Bureau of Labor Statistics. April 3, 2026. “The Employment Situation — March 2026.” https://www.bls.gov/news.release/pdf/empsit.pdf. Accessed May 3, 2026.
14,15 John Butters. FactSet. May 1, 2026. “Earnings Insight.” https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_050126.pdf. Accessed May 3, 2026.
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