Executive Summary
Global equity markets extended their rally for a fifth consecutive week ending 1 May 2026, as a historic Magnificent 7 earnings sweep delivered revenues and AI-driven growth that eclipsed mounting geopolitical noise. The S&P 500 gained 0.91% to a fresh all-time high, the Nasdaq Composite rose 1.12% to its own record close, and the DJIA added 0.55%. The S&P 500 and Nasdaq recorded their strongest monthly performance since 2020, and analysts now estimate Q1 2026 earnings growth for the index at 27.8% year on year — the highest since Q4 2021.
The week was not without serious risk signals. Brent crude surged to $126/bbl intra-day on Thursday — a wartime high — following reports that CENTCOM was briefing President Trump on plans for a potential resumption of military action against Iran. Iran’s Supreme Leader Mojtaba Khamenei issued a defiant written statement vowing to protect Iran’s nuclear and missile capabilities and declaring the Persian Gulf off-limits to Americans. The Fed held rates at 3.50–3.75% in a historically split 8-4 vote, with Jerome Powell delivering his final press conference as Chair. Q1 GDP came in at 2.0% annualised — below the 2.3% estimate. Trump notified Congress on 1 May that hostilities were ‘terminated’, but the Strait of Hormuz remains approximately 90% closed, with U.S. gasoline averaging $4.30/gallon.
Market Snapshot
Weekly performance across major global indices (week ending 1 May 2026). Friday’s closing prices are stated below. Brent crude hit an intra-day wartime high of $126/bbl on Thursday before settling lower; that spike is not fully reflected in the week’s closing price.
| Index | Friday’s Closing Price | Weekly Change (%) | Direction |
| DJIA | 49,499.27 | 0.55 | ▲ |
| S&P 500 | 7,230.12 | 0.91 | ▲ |
| NASDAQ Composite | 25,114.44 | 1.12 | ▲ |
| FTSE 100 (UK) | 10,363.93 | -0.15 | ▼ |
| CAC 40 (France) | 8,114.84 | -0.53 | ▼ |
| STOXX Europe 600 | 611.55 | 0.15 | ▲ |
| Nikkei 225 (Japan) | 59,513.12 | -1.16 | ▼ |
| CSI 300 (China) | 4,807.31 | 0.8 | ▲ |
| Hang Seng (Hong Kong) | 25,776.53 | -0.78 | ▼ |
| Brent Crude | 108.17 | 6.14 | ▲ |
| Gold | 4,625.60 | -1.84 | ▼ |
Foreign Exchange
(For the week ending 1st May 2026)
| Pair | Friday’s Close | Week’s Change |
| EUR/USD | 1.1729 | 0.0045 (0.39%) |
| USD/JPY | 156.881 | -2.866 (-1.79%) |
| GBP/USD | 1.3603 | 0.0137 (1.02%) |
| USD/CHF | 0.7814 | -0.0048 (-0.61%) |
| AUD/USD | 0.7201 | 0.0071 (1.00%) |
U.S. Markets Overview
Equities and Earnings
U.S. equity markets advanced for a fifth consecutive week as the most consequential earnings period of 2026 delivered broadly positive results. The S&P 500 gained 0.91% to a record close of 7,230.12, the Nasdaq Composite rose 1.12% to a fresh all-time high of 25,114.44, and the DJIA added 0.55% to 49,499.27. The S&P 500 and Nasdaq closed their strongest April since 2020. With 63% of S&P 500 companies now having reported, 84% have beaten earnings estimates — the highest beat rate since Q2 2021 — and the blended year-on-year earnings growth rate stands at 27.8%, sharply above the 15% estimated a week earlier.
The week’s defining event was Wednesday’s Magnificent 7 earnings cluster. Alphabet reported Q1 revenue of $109.9 billion, up 20% year on year, with Google Cloud growing 63% to $20 billion — the clearest evidence yet that AI capex is converting into customer revenue. Amazon’s AWS grew 28% to $37.6 billion, its fastest pace in 15 quarters, while net sales reached $181.5 billion with EPS of $2.78 against a $1.62 estimate. Microsoft reported fiscal Q3 revenue of $82.89 billion, up 18%, with its AI run rate climbing past $37 billion annually, up 123% year on year. Meta posted revenue of $56.3 billion, up 33%, though shares fell approximately 8% in after-hours trading after the company raised its 2026 capital expenditure guidance to $125–145 billion, citing higher component pricing. Apple followed Thursday, reporting fiscal Q2 revenue of $111.2 billion, up 17% year on year, and guiding Q3 growth of 14–17%, well ahead of the approximately 10% consensus. Apple shares rose more than 3% on Friday. Combined 2026 AI capex across the four hyperscalers is now tracking $650–700 billion.
Federal Reserve and Post-Close Developments
The Federal Reserve held interest rates at 3.50–3.75% on Wednesday in what proved to be Jerome Powell’s final meeting as Chair, as confirmed at his press conference.
Over the weekend, oil markets remained elevated as Iran submitted a fresh proposal through Pakistani mediators that offered to reopen the Strait of Hormuz without addressing its nuclear programme — a condition Trump has made central to any deal. The proposal was widely expected to be rejected. Brent closed Monday above $107/bbl. Trump’s May 1 declaration that hostilities were ‘terminated’ — timed to the 60-day War Powers Act deadline — was viewed by analysts as a legal manoeuvre, not a resolution, given the Strait remains ~90% closed.
Economic Data
U.S. Q1 2026 GDP came in at 2.0% annualised, a significant rebound from Q4 2025’s 0.5%, driven by investment, exports, consumer spending and government outlays. The print was slightly below the 2.3% consensus estimate. Core GDP – real final sales to private domestic purchasers was stronger at 2.5% annualised. Average gasoline prices hit $4.30/gallon nationally, up from $2.98 at the start of the war. The Employment Cost Index rose 0.9% quarter on quarter, slightly above expectations. Housing investment fell 8% — its fifth consecutive quarterly decline — as elevated mortgage rates continue to weigh.
European Markets
European equities were broadly flat on the week, with the STOXX Europe 600 edging 0.15% higher, the FTSE 100 slipping 0.15%, and the CAC 40 declining 0.53%. The week opened positively as Monday saw Barclays, UBS, Deutsche Bank and BNP Paribas all report earnings ahead of expectations, lifting the banking sector. Brent crude’s Thursday surge to $126 intra-day reversed those gains in energy-exposed sectors.
The macro data confirmed the stagflation dynamic taking hold. Eurozone Q1 GDP grew just 0.1% quarter on quarter, below the 0.2% consensus, dragged by a sharp contraction in Ireland and disappointing French output. HICP inflation rose to 3.0% in April, up from 2.6% in March, with energy inflation running at 10.8% year on year. Core inflation dipped modestly to 2.2%. The ECB held its deposit rate at 2.00% on Thursday, with President Lagarde declining to pre-commit but stating the Council would have more information at June.
Asian Markets
Japan
The Nikkei 225 fell 1.16% to 59,513.12, pulling back from the prior week’s all-time high as yen volatility and oil price uncertainty weighed on sentiment. The Bank of Japan held rates, as widely expected, but the yen’s continued slide through 160 per dollar prompted the Ministry of Finance to intervene in currency markets on Thursday – Japan’s first intervention in nearly two years, which briefly pushed USD/JPY to 155.
China
The CSI 300 rose 0.80% to 4,807.31 while the Hang Seng declined 0.78% to 25,776.53. The week was relatively quiet on the data front, with China maintaining stable policy settings. As the world’s largest energy importer, China’s growth trajectory remains exposed to the prolonged Strait of Hormuz closure, though the government has been quietly managing supply through alternative routes. Markets continue to watch China’s diplomatic channel with Iran, which remains one of the few back channels still nominally open.
Commodities
Oil
Brent crude rose 6.14% on the week to close at $108.17/bbl, with a dramatic intra-day spike to $126 on Thursday — a wartime high and the highest level since 2022 — following Axios reporting that CENTCOM was briefing Trump on options for possible resumed military action. Prices retreated as Iran was reported to have submitted a new peace proposal through Pakistani mediators, with Friday’s oil easing on that headline. The Strait of Hormuz remains approximately 90% closed, with the IMO tracking approximately 20,000 mariners and 2,000 vessels stranded in the Persian Gulf. Trump’s May 1 War Powers notification declared hostilities ‘terminated’, though the blockade and Strait closure both remain in force. IEA has characterised the disruption as the largest energy supply shock on record; U.S. refining margins have doubled since the conflict began. Goldman Sachs’s recession trigger model activates at sustained $130 Brent.
Gold
Gold fell 1.84% on the week to $4,625.60/oz, its second consecutive weekly decline. The powerful AI earnings-driven risk appetite, combined with the Fed’s hold (reducing near-term rate-cut expectations) and a firmer dollar in the first part of the week, all weighed on the safe-haven bid. Gold retains its structural support from central bank buying, persistent geopolitical uncertainty and dollar reserve diversification trends. The weekend’s renewed Khamenei rhetoric and continued Strait closure are likely to provide support at the start of the new week.
Week Ahead
The primary focus in the week of May 4-8 will be the diplomatic status of Trump’s May 1 ‘hostilities terminated’ declaration. Iran’s counter-proposal — offering to reopen the Strait without addressing its nuclear programme — is expected to be rejected, and the next move from Washington will set the tone for oil markets. Any credible diplomatic pathway, or conversely any signal of resumed military planning, will be the dominant market catalyst.
On the policy front, attention turns to the Kevin Warsh Fed Chair transition, with the Senate confirmation process advancing. Markets will watch for any early signals on Warsh’s policy stance, particularly given the four FOMC dissents at last week’s meeting. In Europe, June’s ECB and BoE meetings are now live for rate hikes; energy and inflation data will be closely tracked. In Asia, the BoJ’s next move and yen volatility remain in focus following Thursday’s MoF intervention.
On the corporate side, the heaviest part of Q1 earnings season is now behind us. Nvidia’s results on 20 May represent the next major AI-cycle bellwether. Berkshire Hathaway’s annual meeting on 3 May will be watched for Warren Buffett’s views on the macro and energy environment. The BEA’s second Q1 GDP estimate drops 28 May.
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