Morning Brew May 7 2026

Good morning!

Hopes for peace in the Middle East sent risk sentiment soaring: oil dropped, while equities, precious metals, and Bitcoin rallied. Yields and the US dollar lost ground.

The S&P 500 closed up 1.5% at 7,365.12, marking its biggest gain since April 8. The Nasdaq 100 jumped 2.1%, logging its 10th record close of 2026 at 25,838.94.

Advanced Micro Devices led the charge, soaring 19% after impressive quarterly results. Super Micro Computer surged 24.5%. Disney jumped 7.5%, beating earnings estimates as streaming and parks drove revenue growth despite ongoing geopolitical uncertainty.

European equities rallied strongly on optimism for a US-Iran peace deal. The Stoxx Europe 600 Index climbed 2.2% to 623.25, its largest move since April 8, as banks led the rally. Germany's DAX rose 2.1% to 24,918.69, with MTU Aero Engines up 10.1%. The FTSE 100 gained 2.15% to 10,438.66, led by HSBC Holdings up 5.0% and Fresnillo up 11.1%. Switzerland's SMI advanced 1.8%, with Richemont leading gains. Novo Nordisk raised its 2026 profit guidance as Wegovy, its weight-loss drug, outperformed Q1 expectations.

Asian stocks hit fresh records: Japan's Nikkei returned from holiday to cross 62,000 for the first time, while Korea's Kospi and Taiwan's benchmark also notched new highs.

The US dollar index is near 98, EURUSD trades at 1.1750, GBPUSD is testing 1.36, and USDJPY sits at 156.35. Bitcoin stands at 81k. Precious metals are steady after yesterday's surge: gold is at 4,700, silver at 77.90—up 3.4% and 9.2% over the week, respectively. Platinum is at 2,060. Oil is just off yesterday’s lows, at 101.80 in London and 95.60 in the US.

The only relevant short term question: Will the US and Iran turn current optimism into a lasting agreement—or will tensions flare up again? Some reports suggest the US’s more accommodating stance may be driven by Saudi Arabian pressure, not negotiation progress.

We will start looking at the longer term fallout of the war in due course but not today or tomorrow in my view

Expect light earnings and data today; the next big release is tomorrow's Non-Farm Payrolls. Unless there's a major surprise, markets will stay focused on Middle East developments. Trade carefully—sentiment can swing quickly, as we saw yesterday. Short-term traders, this is you should enjoy

Longer-term, S&P companies are posting their strongest earnings growth in four years. Passive investments remain robust, offering a stabilizing force in these markets.

Thursday, May 7, 2026
Germany Industrial Orders, Initial Jobless Claims
Earnings: Blackstone, McDonald's, Coinbase

Friday, May 8, 2026
Germany Industrial Output, Nonfarm Payrolls, University of Michigan Sentiment Final