Sunday, May 3

Global markets closed the prior week on a high note after April's stellar gains, with the S&P 500 up 10.4% for its best monthly return since November 2020, driven by solid Big Tech earnings that offset hawkish Federal Reserve dissents. The index rose 1.0% on Thursday to a record high, while the Nasdaq advanced amid mixed Magnificent Seven results—Alphabet shares jumped on AI demand strength, but Meta plunged 8.7% after hiking capex guidance, surprising desks expecting smoother profitability paths. Value outpaced growth as oil-fueled energy stocks led, shrugging off Middle East war headlines that consensus feared would cap risk appetite.

Yields pulled back slightly to 4.38% on the 10-year Treasury after climbing on FOMC signals, where three members dissented against easing language in a hawkish tilt unseen under Powell, tempering cut bets despite Q1 GDP at 2.0% and core PCE at 3.2% YoY. Oil settled at $105/barrel WTI, down amid U.S.-Iran diplomacy hopes but up over the week on supply risks, lifting energy over tech. The dollar held firm, with JGB 10-year yield at 2.50% after BoJ upped FY2026 inflation to 2.8% while halving growth to 0.5%, hinting at hikes despite war drags. China's Moody's outlook stabilized on resilient growth, boosting Asia sentiment.

Cross-asset rotation favored value and energy over AI darlings, as higher yields and dissents challenged the soft-landing narrative traders priced at 70% cut odds for year-end. European indexes edged higher post-ECB hold, while crypto stayed sidelined.

Monday's nonfarm payrolls print matters because April's 189k jobless claims low already beat consensus; a sub-150k read would solidify Fed pause, squeezing rate-cut positioning further.