AE Wealth Management: Weekly Market Insights | 5/3/26-5/9/26
Weekly Market Commentary
THE WEEK IN REVIEW: May 3-9, 2026
The melt-up continues!
Markets took off again last week, with the S&P 500 and Nasdaq setting new records once again.1,2 The Dow continued on the path back to 50,000, something we haven’t seen since Feb. 11.3
As usual, the Iran conflict and oil prices dominated the news cycle. The price of oil is the first sign that either things are getting better or that there has been an unexpected turn, which triggers markets to sell off.4 The latest news is that the U.S. and Iran are nearing a deal to end the hostilities. The U.S. blockade of Iran is having a significant impact, and Iran has been unable to break the blockade, despite all their bluster and rage.
After announcing hostilities with Iran were largely over, President Trump announced Project Freedom, which would involve U.S. warships chaperoning commercial vessels through the Strait of Hormuz.5 The announcement could be read as, “The U.S. is going to parade our ships, with commercial vessels in tow, under the Iranians’ noses, and if they shoot at us, it will give us the excuse to ramp things back up.” Whatever the objectives are or were, the operation was abruptly halted two days later, “based on a request from Pakistan and other countries,” because an agreement was being evaluated for ending the conflict altogether.6 Oil dropped on the news and markets soared.
Unfortunately, this is how things will likely be for a while. If there’s a glitch in the agreement and any hint of the conflict continuing, oil will spike back up and markets will retreat. The only silver lining may be that we’re at record highs, and any pullback will not be meaningful given that Iran is incapable of posing any significant threat to the region anymore.
So what’s moving the markets besides Iran and oil? Earnings have been strong, and the economy seems to be weathering the storm of high energy prices so far.7 It’s hard to avoid the headlines, but the market is telling us things should improve in the next few months.
The other measures of economic health, inflation and jobs, have not been as bad as feared or have improved. There’s real hope that markets will rip again as soon as the conflict is over. Then we will see what kind of agreement we made with Iran and what impact higher oil prices will have on the economy in the intermediate term. Was there any lasting damage? Or is all this temporary and will evaporate with lower gas prices? The reality will be somewhere in the middle, but until we can see things clearly, we will have to choke on the smoke and be blinded by the mirrors. These conditions don’t make for good decision-making, so stay the course.
Jobs market shows signs of improvement
Let’s talk about jobs for a bit. Remember a few months back when there were some dire predictions about the jobs market stumbling? That hasn’t come to pass so far. The March Job Openings and Labor Turnover Summary (JOLTS) report was about the same as February (6.9 million in March versus 6.8 million in February).8 That number is stale because it’s always delayed by a month, but it still gives us a snapshot into the period where the predictions of a deteriorating jobs market were being made. The report showed job openings weren’t drying up but remained steady. And hiring may not have been robust, but it was picking up.
Then we got the ADP employment number for April last Wednesday, which came in at a very strong +109,000.9 It was looking like jobs had hit a soft spot and flattened out over the end of 2025 and first quarter of 2026, only to begin a recovery as we entered spring. ADP reported +62,000 new jobs in March, so based on that data point, jobs were ramping up and pay increases were outpacing inflation.10
On Friday, the April employment situation from the U.S. Bureau of Labor Statistics (BLS) confirmed job growth is solid.11 Consensus expectations were for +63,000 new jobs to be created, according to those polled. In reality, there were +115,000 new jobs reported for April, almost double the estimates. The unemployment rate remained at 4.3%. Wage growth was less than expected but is in line with inflation. Overall, it was decent news for a jobs market that had been written off a few months ago.
Coming this week
- As has been the norm lately, Monday will be quiet to start the week. April existing home sales is the meaningful data that day.
- If last week was all about jobs, then this week is all about inflation. We’ll get the Consumer Price Index (CPI) and Core CPI for April on Tuesday. With oil and gas prices surging, expectations are that both of these numbers will go up. The real question is how long can we expect them to stay at these levels before they come down?
- Wednesday will feature the Producer Price Index (PPI) and Core PPI. Costs for producers will definitely be up, so the debate here is how soon and how much will be passed on to the consumer on top of what we’ve already seen. We’ll also get MBA mortgage applications on Wednesday.
- Thursday will include jobless claims, retail sales, import prices and business inventories.
- We’ll end the week with the Empire State manufacturing survey, industrial production, capacity utilization and home builder confidence on Friday.
- First-quarter earnings are almost done, with 89% of S&P 500 companies reporting results. So far, 84% have reported positive earnings per share, and 80% have reported positive revenues. Earnings growth for Q1 was 27.7%, which marks the highest earnings growth for the index since the fourth quarter of 2021.
- For the current quarter, 38 S&P 500 companies have issued negative guidance, while 39 have issued positive. Valuation is still historically high, with the forward 12-month price-to-earnings (P/E) ratio at 20.1 versus 22.2 last quarter. Although this P/E ratio is a little higher than the 5-year average (19.9) and 10-year average (18.9), P/E could jump again next quarter due to the market’s recovery since the March lows.
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500® | 2.33% | 8.08% | 30.63% | 21.37% | 11.82% |
| NASDAQ | 4.51% | 12.93% | 46.40% | 28.89% | 13.80% |
| DJIA | 0.22% | 3.22% | 19.92% | 13.85% | 7.36% |
Interest Rates: | |||||
| 5/8/2026 | 5/1/2026 | ||||
| UST 10 YR Government Bond Yield | 4.36% | 4.37% | |||
| Germany 10 YR | 3.00% | 3.03% | |||
| Japan 10 YR | 2.48% | 2.51% | |||
| 30 YR Mortgage | 6.47% | 6.38% | |||
| Oil | $95.42/ppb | $101.94/ppb | |||
| Regular Gas | $4.53/ppg | $4.45/ppg | |||
| All data as of May 8, 2026. | |||||
Sources:
1 Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC/. Accessed May 10, 2026.
2 Yahoo! Finance. “NASDAQ Composite (ˆIXIC).” https://finance.yahoo.com/quote/%5EIXIC/. Accessed May 10, 2026.
3 Yahoo! Finance. “Dow Jones Industrial Average (ˆDJI).” https://finance.yahoo.com/quote/%5EDJI/. Accessed May 10, 2026.
4 Business Insider. “Oil (WTI).” https://markets.businessinsider.com/commodities/oil-price?type=wti. Accessed May 10, 2026.
5 C. Todd Lopez. U.S. Department of War. May 5, 2026. “‘Project Freedom’ Aims to Get Thousands of Commercial Ships Safely Through Strait of Hormuz.” https://www.war.gov/News/News-Stories/Article/Article/4477864/project-freedom-aims-to-get-thousands-of-commercial-ships-safely-through-strait/. Accessed May 10, 2026.
6 Filip Timotija. The Hill. May 5, 2026. “Trump announces pause on Project Freedom.” https://thehill.com/policy/defense/5865012-trump-pauses-project-freedom/. Accessed May 10, 2026.
7 John Butters. FactSet. May 8, 2026. “Earnings Insight.” https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_050826.pdf. Accessed May 10, 2026.
8 U.S. Bureau of Labor Statistics. May 5, 2026. “Job Openings and Labor Turnover Summary.” https://www.bls.gov/news.release/jolts.nr0.htm. Accessed May 10, 2026.
9 ADP Research. April 2026. “ADP National Employment Report.” https://adpemploymentreport.com/. Accessed May 10, 2026.
10 ADP Research. April 1, 2026. “ADP National Employment Report: Private Sector Employment Increased by 62,000 Jobs in March; Annual Pay was Up 4.5%.” https://mediacenter.adp.com/2026-04-01-ADP-National-Employment-Report-Private-Sector-Employment-Increased-by-62,000-Jobs-in-March-Annual-Pay-was-Up-4-5. Accessed May 11, 2026.
11 U.S. Bureau of Labor Statistics. May 8, 2026. “Employment Situation Summary.” https://www.bls.gov/news.release/empsit.nr0.htm. Accessed May 10, 2026.
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