Market Context
The week of May 4–9 delivered the final act of Q1 earnings season, and the first labour market report was fully captured under conflict conditions. By Friday's close, the S&P 500 had risen to 7,398.93 — topping 7,300 for the first time — with the Nasdaq closing at 26,247.08 and the Dow at 49,609.16. The VIX settled at 17.19, crude oil at $95.42, and gold at $4,730.70. The S&P 500 and Nasdaq both capped a sixth consecutive week of gains, driven by strength in memory stocks — the Roundhill Memory ETF surged nearly 30% on the week. Beneath the indices, the week's substance was concentrated in three places: AMD's data centre results, Disney's streaming inflexion, and an April jobs report that beat a very low bar without resolving the Fed's core dilemma. S&P Global Capital Street FX
Key Signals
AMD delivered the most important AI hardware product of the quarter. AMD reported Q1 revenue of $10.3 billion, up 38% year-on-year, with non-GAAP EPS of $1.37 — beating consensus estimates of $1.29. Data Centre revenue reached $5.8 billion, up 57% year-on-year. AMD doubled its estimate of the total addressable market for server CPUs from $60 billion to over $120 billion by 2030, citing structural acceleration in compute demand driven by agentic AI deployments. Q2 guidance of $11.2 billion implies 46% year-on-year revenue growth. The stock hit an all-time high of $417 in the days following the report. CNBCFortune
Palantir beat dramatically — and sold off anyway. Palantir reported Q1 revenue of $1.633 billion, up 85% year-on-year and 16% sequentially, beating the analyst consensus of $1.54 billion by a wide margin — its fastest revenue growth since its 2020 IPO. Despite the beat-and-raise quarter, shares fell more than 7% on the week. The move is a structural signal: at an elevated valuation, even record results are insufficient if the market perceives the competitive moat as narrowing. Federal Reserve,
Kraken BlogDisney confirmed that streaming has structurally turned. Disney's entertainment streaming business posted an operating margin above 10% for the first time — hitting 10.6% — with streaming operating income surging 88% to $582 million. Total company revenue reached $25.17 billion, slightly above analyst forecasts, with adjusted EPS of $1.57, beating expectations. The company reaffirmed roughly 12% adjusted EPS growth in fiscal 2026 and double-digit gains in 2027. Carbon Credits + 2
The April jobs report beat a very low bar — but the labour market is cooling. Nonfarm payrolls rose 115,000 in April — well above the 55,000 Dow Jones consensus — but down sharply from 185,000 in March. The unemployment rate held at 4.3%. Average hourly earnings rose just 0.2% for the month and 3.6% annually, both below estimates. The combination — better than feared, but structurally softening — gives the Fed no reason to move in either direction. Earnings Whispers
Q1 earnings season closed with a historically strong beat rate. With 89% of S&P 500 companies having reported, 84% beat EPS estimates — above the one-year average of 79%, the five-year average of 78%, and the ten-year average of 76%. The blended year-on-year earnings growth rate for Q1 2026 stands at 27.7%. The forward 12-month P/E ratio now stands at 21.0 — above both the five-year average of 19.9 and the ten-year average of 18.9. S&P GlobalS&P Global
Stock Market Performance & Other Assets
Equities
The S&P 500 topped 7,300 for the first time on Friday, capping six straight weeks of gains. Memory stocks led the advance, with the Roundhill Memory ETF (DRAM) surging nearly 30% on the week. The Russell 2000 added 0.76% to close at 2,861.21, continuing its recovery from conflict-period lows. European equities underperformed, held back by elevated energy costs and dollar strength. Asian markets outperformed, with Korean and Taiwanese tech stocks among the week's strongest performers. CapitalstreetfxS&P Global
Commodities
Oil prices whipsawed throughout the week as markets swayed between hopes for a negotiation breakthrough and concerns about a fraying ceasefire. Brent seesawed between $100 and $114 per barrel before settling at $102 by Friday — a 17-day low. WTI closed at $95.42 per barrel. Gold advanced to $4,730.70 per ounce, holding its safe-haven premium as geopolitical uncertainty continued to support institutional demand for the metal. The Rio Times + 2
Fixed Income & Crypto
The 10-year Treasury yield fell modestly, settling at 4.418%, as oil prices eased and the softer-than-expected wage data in the jobs report provided a slight relief to the inflation narrative. Inflation markets are pricing almost no risk premium, reflecting the view that the Fed's hold is structural rather than temporary. Bitcoin closed at $80,840 — up 0.95% on the day and continuing its recovery above $80,000, tracking risk sentiment rather than acting as an independent macro variable. CaixaBank Research + 2
Market Movers & Shakers
The week's results reinforced a clear bifurcation in how the market rewards execution versus expectation. AMD's data centre growth at 57% year-on-year — combined with a doubling of its TAM estimate — attracted capital. Palantir's 85% revenue growth was not enough to hold a stock priced for perfection. Disney's streaming margin breakthrough was structural and rewarded accordingly. The pattern is consistent with what has defined this earnings season throughout: the market is paying for verified monetisation, not for potential.
One Insight
The S&P 500 topping 7,300 for the first time capped six consecutive weeks of gains. Some analysts are comparing the current period to the late 1990s internet boom — "the internet on steroids," as one portfolio manager put it — with the argument that the market is still in the second or third inning of the AI investment cycle. The comparison carries both a bullish and a cautionary reading. The bullish case is that the structural demand for AI infrastructure — validated this week by AMD's data centre figures and the memory sector's 30% surge — is real and still early. The cautionary case is that the late 1990s also featured record earnings beat rates, expanding multiples, and genuine technological transformation — right up until it didn't. Capitalstreetfx
The forward 12-month P/E ratio for the S&P 500 now stands at 21.0, above both the five-year average of 19.9 and the ten-year average of 18.9. Analysts project year-on-year earnings growth of 21.0% for full-year 2026, with the bottom-up 12-month target price for the index implying 16% upside from current levels. That combination — elevated multiples supported by genuine earnings growth — is not inherently unstable, but it leaves very little room for macro disappointment. Oil at $95, inflation above 3%, and a Fed that cannot ease are the constraints that define the risk envelope. Inside that envelope, the earnings cycle is running strong. The question heading into the second half of the year is whether the envelope holds. S&P Global
What We’re Watching (next 7–14 days)
US-China summit (May 14–15): President Trump's planned visit to Beijing will cover trade, AI guardrails, and military risk. Any substantive progress on economic relations between the world's two largest economies would be a significant macro signal. Capitalstreetfx
Kevin Warsh's first week as Fed chair (from May 15): The formal transition of Fed leadership introduces a new communication style and a committee that already showed historic internal division. Markets will be watching for any shift in tone on rates.
Applied Materials and Cisco earnings (May 14–15): Two key reads on AI infrastructure spending — semiconductor equipment demand and data centre networking, respectively — will confirm or qualify the AMD-driven optimism from this week.
US-Iran negotiations: Oil's 17-day low on Friday reflected tentative optimism on the Hormuz situation. Any diplomatic development — positive or negative — will move energy markets and, by extension, inflation expectations immediately.
Next week's major earnings:
Cisco Systems reports on Wednesday, May 14. Applied Materials reports on Thursday, May 15. Also reporting across the week: Simon Property Group, Constellation Energy, Mosaic, and a further tranche of retailers and consumer names that will offer the first read on whether the labour market softening is beginning to affect household spending patterns. Capitalstreetfx
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