Morning Brew May 4 2026

Good morning 

The ongoing Iran conflict continues to cast a shadow over global markets, with the closure of the Strait of Hormuz driving sustained volatility and elevated oil prices. The longer the strait remains shut, and the more prolonged its stabilization period, the greater the strain on supply chains. We are already witnessing bottlenecks across a diverse spectrum of goods—including jet fuel, helium, and fertilizers—suggesting that disruptions are becoming increasingly inevitable.

Simultaneously, international relations are growing more tense, as the U.S. government appears to redirect attention toward allies like Italy, Spain, Saudi Arabia, and Germany to deflect from domestic challenges. This shift reflects a broader trend: the global political landscape is becoming markedly more combative and confrontational.

Until the Iran conflict reaches a definitive resolution, market dynamics will remain unpredictable, oscillating in response to alternating waves of positive and negative news. Equities are generally trading on the assumption that governments will deploy deficit spending to mitigate any adverse impacts, with most investors expecting inflation spikes to be temporary. Remarkably, many major indexes are hovering near historic highs. For instance, on Friday, the Dow slipped by 0.3%, while the S&P 500 climbed 0.29%, and the Nasdaq increased 0.89%. Trading volume on U.S. exchanges totaled 15.27 billion shares, compared to 17.64 billion the previous week. For the week as a whole, the S&P 500 gained 0.9%, the Dow rose 0.5%, and the Nasdaq was up 1.1%.

In April, both the S&P 500 and the Nasdaq Composite posted their largest monthly gains since 2020. The S&P 500 surged more than 10%, and the Nasdaq soared over 15%. Both indexes began May with further advances. The earnings season is in full swing, with over 100 companies from the S&P 500 set to report next week and markets digesting the core results. As of Friday, overall S&P 500 earnings were tracking a 27.8% year-over-year increase for the first quarter. Of the 314 companies already reporting, 83% surpassed earnings estimates, and 78% delivered better-than-expected revenues.

Apple’s sales and profits for the fiscal second quarter exceeded analyst expectations, despite supply constraints for advanced processor chips impacting iPhone sales. Apple shares responded by rising 3.3%. Atlassian elevated its annual forecast, leading to a remarkable 30% surge in its share price. Meanwhile, Salesforce and ServiceNow saw gains of 4.1% and 3.2%, respectively. In contrast, Roblox dropped 18% following a revised guidance, whereas Reddit jumped 13% on improved projections. Upcoming highlights include earnings from Palantir, Walt Disney, McDonald's, and Advanced Micro Devices.

Looking at the old proverb “Sell in May and go away”  only one of the last five May performances of the S&P500 have been negative…

President Donald Trump announced an increase increase in tariffs on European Union automobiles and trucks to 25%. Compounding geopolitical tensions, the U.S. is withdrawing 5,000 troops from Germany, revealing deepening divisions over the Iran conflict. Spirit Airlines faces shutdown as its rescue deal collapses. The Pentagon revealed agreements with seven prominent AI companies: SpaceX, OpenAI, Google, NVIDIA, Reflection, Microsoft, and Amazon Web.

President Trump also declared that the U.S. would begin assisting in freeing ships trapped in the Gulf due to the U.S.-Israeli war on Iran, following reports of a tanker struck by unidentified projectiles in the Strait of Hormuz. These developments are weighing on gold and silver prices, while oil remains subdued—currently at 101 in the U.S. and 107.30 in the UK. Gold stands at 4599, and silver at 75.20. The USD Index is at 98.10, as EUR/USD rises to 1.1730, GBP/USD climbs to 135.90, and USD/JPY falls to 156.80 after last week's intervention.

Monday, May 4, 2026
Global PMI
Earnings: Palantir

Tuesday, May 5, 2026
U.S. International Trade, Global PMI
Earnings: Shopify, PayPal, Pfizer, KKR, AMD, Supermicro, Strategy

Wednesday, May 6, 2026
Global PMI
Earnings: Disney, Novo Nordisk, Uber, Arm, Applovin, Snap

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