Weekly Market Update (May 02, 2026)
HIGHLIGHTS
US-Iran negotiation stuck. Oil prices and inflation are expected to stay higher for longer. Central banks stayed on hold this week.
- Fed: Fed signaled a pause, as it would need clearer signs of disinflation before even consider cuts. Economic activities data indicated resilience despite intensified cost pressure. Markets wait for job report for more signals.
- Japan: The Bank of Japan is worried about inflation than growth. Its guidance is more hawkish than the market expected. Japanese yen remains weak, which may cause policy intervention.
- Earnings: 63% of S&P500 companies have reported earnings. Q1 results are stronger than expected. However, the market reaction for EPS beats are unusually muted. Also, many companies have not yet released.
MARKETS
| Nasdaq | 25,114.44 | +1.12% |
| S&P 500 | 7,230.12 | +0.91% |
| Dow | 49,499.27 | +0.55% |
| 10-Year | 4.38 | +7bps |
| Brent | 108.17 | +9.12% |
| DXY | 98.21 | -0.30% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Goldman Sachs: Amid higher energy prices and geopolitical uncertainties, earnings forecast revisions and corporate guidance have remained strong this quarter. Markets adjusted S&P500 EPS forecast up by 1% in 2026.
UBS: S&P500 hit new high this week. Investors shift their stagflation fear to strong corporate earnings. AI demand is holding up as forward guidance and earnings results have been good.
Fixed Income
Goldman Sachs: For AI-related debt supply, data center financing, such as bond issuance for joint venture deals, has grown significantly. AI-related issuance skews towards longer maturities.
J.P. Morgan: Rate-sensitive assets, including treasuries and IG credit, have been slower to heal from the war. Growth fears are reduced, but inflation remains a concern.
Economy
UBS: Incoming new Fed Chair will inherit a less unified committee. The scale of dissent is larger than expected, with 3 regional presidents wanted the easing bias removed, while one governor preferred an immediate cut.
Morgan Stanley: Long-term inflation expectation started to rise, suggestion higher premium to the 10Y inflation. Investors are recommended to look for inflation-protection income.