Pressure Arrives from Crude, War, Tesla, Software
Published as of: May 6, 2026, 9:12 a.m. ET
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| The markets | Last price | Change | % change |
|---|---|---|---|
| S&P 500® Index | 7,137.90 | +73.89 | +1.05% |
| Dow Jones Industrial Average® | 49,490.03 | +340.65 | +0.69% |
| Nasdaq Composite® | 24,657.57 | +397.60 | +1.64% |
| 10-year Treasury yield | 4.30% | +0.01 | -- |
| U.S. Dollar Index | 98.74 | +0.16 | +0.16% |
| Cboe Volatility Index® | 19.39 | +0.47 | +2.48% |
| WTI Crude Oil | $92.70 | –0.24 | –0.26% |
| Bitcoin | $77,775 | –$1,160 | –1.62% |
(Wednesday market open) Anyone who "sold in May and went away" may be having some early regrets, though there's a long way until June. Major indexes surged 1% this morning, extending the tech-fueled rally as hopes for peace sent crude oil down more than 7% back toward $94 per barrel. Wall Street's jump shot got an assist from Advanced Micro Devices (AMD), up 18% ahead of the open after a solid earnings outing, and Walt Disney (DIS), up 4% after the same.
Data this morning included ADP employment, which showed private sector job growth of 109,000 in April. That’s slightly below the 120,000 expected but almost double the 61,000 in March and the most in more than a year, led by service-providing jobs. This may lend some positive vibes ahead of Friday's April nonfarm payrolls report, expected to show relatively light jobs growth near 60,000. Still, data took a back seat to AMD earnings and crude's descent, which followed reports that Iran is reviewing a U.S. proposal and the two sides are closer to an agreement than in a while. There's no guarantee, of course, and the Strait of Hormuz remains sealed.
Major indexes surged to new all-time highs in a broad rally Tuesday, led by the roaring chip sector. "The bullish momentum still appears to be intact for the AI and AI-adjacent trade," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research, or SCFR. "Are we overbought in tech and chips? Yes, but in the near term it doesn't seem to matter. It's tough to slow momentum when stocks and the PHLX Semiconductor Index are breaking out into all-time high territory—it suggests that price discovery is still searching for equilibrium and hasn't found it yet."
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Three things to watch
- Results provide welcome distraction: The earnings drumbeat has kept high oil prices from being the primary factor the way they were in March. The strength of earnings season, including a strong beat rate, has shifted a little of the direct intraday correlation between oil and stocks. "The focus, maybe rightly so, has been on earnings season, which has been quite strong," said Liz Ann Sonders, chief investment strategist at SCFR, in a CNBC appearance Tuesday. "The only rub with earnings is that three stocks represent about 70% of the dollar-based growth: Alphabet (GOOGL), Amazon (AMZN), and Meta (META). That's something to be mindful of looking ahead." As earnings for the first quarter keep topping expectations, analysts have begun raising their estimates for coming quarters. Earnings growth in the first quarter is near 28% year over year, though the three stocks above contributed hugely to that.
- Growth picture assessed as jobs data looms: While recent data has been mixed, generally the economy appears to be holding together despite the war and expensive crude oil. Last week's mega-cap earnings might help explain why. "The AI capex binge appears to be the dominant focus from investors, meaning, as long as AI capex is on the rise, the ripple effects will provide a foundation to economic stability," Peterson said, referring to heavy capital spending from the likes of Meta and Amazon. However, gross domestic product growth of 2% on an annualized basis in the first quarter missed expectations and is relatively low, historically. The April layoffs data early tomorrow could provide more perspective. Nonfarm payrolls on Friday, of course, is the cherry on top. That report should be closely checked for any downward revisions to past reports, which have become increasingly common. The types of jobs being created is another element to monitor, as ADP showed lower-paying services employment far outpacing growth in goods-producing jobs.
- Rate hike odds surge: As of early today, the CME FedWatch Tool put odds of a rate cut this year at just 12%, and increasingly baked in higher odds of a rate hike. Chances of rates ending the year above their current 3.5% to 3.75% range jumped to nearly 30% early this week amid war-driven inflation worries before slipping to around 13% today. Rising Treasury yields this week reflected higher rate hike odds and heavier borrowing by the U.S. Treasury, and possibly trepidation ahead of this Friday's jobs report. A surge in jobs growth could keep the yield rally going, perhaps setting up a "good news is bad news" scenario for stocks. Based on futures trading, odds remain highest of no Fed rate change this year, despite soon-to-be Fed Chairman Kevin Warsh favoring lower rates over time. Current Chairman Jerome Powell—who's staying on the board—and three other Federal Open Market Committee (FOMC) members seem prone to keep rates from falling, and Warsh has just one vote. Higher yields represent a potential brake on stock prices, especially with seasonal factors less bullish for stocks from here, historically.
Crypto currents
A cruel month for crypto security chiefs: April unexpectedly turned into Security Month for the crypto world, with this past weekend's nearly $290 million hack delivering the latest blow to its security reputation. Google AI kicked things off on March 30 with a research paper saying quantum computing could be just years away and would enable hacking of certain bitcoin accounts in about nine minutes. Though analysts say there's plenty of time to shore up security, the paper has prompted institutional investors to ask a lot of questions and has marginally slowed investment allocations, according to Matt Hougan, chief investment officer of Bitwise Asset Management. The Google paper also got the attention of blockchain management. On Monday, Ripple published a four-phase plan to make its chain quantum-resistant by 2028. Meanwhile, the bitcoin world is debating how to respond to the quantum threat. But a significant threat is already here: old-fashioned hacking. On April 1, DeFi platform Drift Protocol lost an estimated $285 million to North Korea-backed hackers. And on Saturday, a Kelp DAO-developed "bridge" between DeFi platforms that holds crypto coins lost almost $290 million to hackers. The stolen coins were then used as collateral on the decentralized lending platform Aave, prompting around $9 billion in outflows by Monday after the news broke. The hack highlighted the risk of the structural interconnectedness of the DeFi industry as Wall Street grows ever-more interested in blockchain technology.
" id="body_disclosure--media_disclosure--603306" >A cruel month for crypto security chiefs: April unexpectedly turned into Security Month for the crypto world, with this past weekend's nearly $290 million hack delivering the latest blow to its security reputation. Google AI kicked things off on March 30 with a research paper saying quantum computing could be just years away and would enable hacking of certain bitcoin accounts in about nine minutes. Though analysts say there's plenty of time to shore up security, the paper has prompted institutional investors to ask a lot of questions and has marginally slowed investment allocations, according to Matt Hougan, chief investment officer of Bitwise Asset Management. The Google paper also got the attention of blockchain management. On Monday, Ripple published a four-phase plan to make its chain quantum-resistant by 2028. Meanwhile, the bitcoin world is debating how to respond to the quantum threat. But a significant threat is already here: old-fashioned hacking. On April 1, DeFi platform Drift Protocol lost an estimated $285 million to North Korea-backed hackers. And on Saturday, a Kelp DAO-developed "bridge" between DeFi platforms that holds crypto coins lost almost $290 million to hackers. The stolen coins were then used as collateral on the decentralized lending platform Aave, prompting around $9 billion in outflows by Monday after the news broke. The hack highlighted the risk of the structural interconnectedness of the DeFi industry as Wall Street grows ever-more interested in blockchain technology.
On the move
- Advanced Micro Devices popped 15% after reporting better-than-expected results and guidance late yesterday. Revenue rose nearly 38% year over year, led by a 57% jump in data center segment revenue.
- Walt Disney posted 5% early gains after quarterly earnings topped analysts' estimates and revenue rose 7% to above $25 billion. Also, domestic theme park attendance fell 1% last quarter, though international theme parks and cruise ship revenue climbed 2%.
- Super Micro Computer (SMCI) soared 13% in the early going. Earnings for the data center infrastructure provider topped expectations, though revenues missed. Guidance was stronger than expected.
- Nvidia (NVDA) climbed 2% early and Corning (GLW) soared 18% as Nvidia announced the two companies are in a long-term partnership to strengthen U.S. manufacturing for AI infrastructure. The deal includes three new manufacturing plants that will create 3,000 U.S. jobs. These plants will focus on advanced optical connectivity manufacturing.
- Intel (INTC) climbed nearly 13% Tuesday and extended gains another 4% this morning on a Bloomberg report that Apple (AAPL) held talks with Intel about possibly producing some of the chips for Apple's devices. Apple has been relying on Taiwan Semiconductor Manufacturing (TSM), shares of which fell nearly 2% Tuesday. Apple rallied 2.6% and is approaching the all-time highs it posted last fall. Intel has soared from $40 to $108 per share in just over a month.
- Uber Technologies (UBER) popped 8% in early action even though its 14% annual revenue climb to $13.2 billion slightly missed consensus. Earnings per share topped analysts' estimates, while gross bookings, trip volume, and active users kept growing during the quarter. Guidance for the current quarter was toward the low end of the consensus range.
- CVS Health (CVS) added 5% this morning after easily beating analysts' earnings and revenue estimates and seeing better-than-expected growth in every business segment. CVS also raised guidance for the full year.
- Arm Holdings (ARM) popped 12% ahead of earnings later today. Shares surged over the last month with the rest of the chip sector. Investors might want to check for any updates on the Chinese market amid recent trade tension. At its investor day in March, ARM shared a strategic pivot in which it plans to go from being a chip licensor to a direct silicon provider. It also issued strong guidance.
- Airline and cruise shares racked up gains early today on falling oil prices and hopes for an end to the war. United Airlines (UAL) rose 8%, Delta Air Lines (DAL) rose 7.4%, and Royal Caribbean (RCL) recently traded 7.6% higher. Meanwhile, the dollar fell to pre-war levels and metals prices rose. Energy-related shares mostly fell.
- Arista Networks (ANET) tumbled 8% despite earnings and revenue that topped consensus views. The company also shared guidance above Wall Street's expectations. The company's slightly lower-than-expected forecast for second quarter adjusted operating margin may have disappointed investors, Barron's reported.
More insights from Schwab
Relief picture: The market's recent rally comes despite elevated fuel costs and continued geopolitical uncertainty. So, is this buying strength really sustainable? The latest episode of Washington Wise explores the concept of relief rallies through the lens of the current market.
Munis and oil—what's the link? How could higher oil prices affect the municipal bond market? There are possible positive and negative impacts, so investors might want to learn about them in our latest article and evaluate their concentration risk.
Optimize strategy for options trading during earnings: Check out our video on how to optimize your strategy selection for earnings reports. Trading options around earnings may sound like a good strategy, but it's also a challenge.
Chart of the day
Data source: CME Group. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
The PHLX Semiconductor Index (SOX—purple line) has outpaced 14% gains for the small-cap Russell 2000® (RUT—blue line) and 6.8% for the S&P 500 Index (SPX—candlesticks) over the last three months. One thing to watch is the relative strength index (RSI—bottom chart) for the S&P 500. It's now above 70, traditionally an overbought level. If RSI starts to slip, it could point to struggles for the SPX.
The week ahead
Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.
April 24: Final April University of Michigan Consumer Sentiment.
April 27: Expected earnings from Verizon (VZ), Domino's Pizza (DPZ), Public Storage (PSA), and Nucor (NUE).
April 28: April consumer confidence and expected earnings from Coca-Cola (KO), Novartis AG (NVS), Corning (GLW), BP PLC (BP), Spotify (SPOT), UPS (UPS), American Tower (AMT), Sherwin-Williams (SHW), Visa (V), T-Mobile (TMUS), Seagate (STX), Starbucks (SBUX), Waste Management (WM), and Mondelez (MDLZ).
April 29: February housing starts and building permits, March durable orders, February new home sales, FOMC interest rate decision, and expected earnings from Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), Meta (META), AbbVie (ABBV), and Qualcomm (QCOM).
April 30: ECB rate decision, Q1 GDP first estimate, March PCE and core PCE prices, and expected earnings from Apple (AAPL), Eli Lilly (LLY), Mastercard (MA), Caterpillar (CAT), Merck (MRK), ConocoPhillips (COP), Amgen (AMGN), Altria (MO), SanDisk (SNDK), and Western Digital (WDC).