General Market News

Traders on prediction platform Kalshi now see a 58% chance the U.S. and Iran will reach a nuclear deal by 2027, with odds rising following an Axios report that the countries are close to an agreement to end the Middle East war. However, these odds remain below mid-April levels when optimism peaked at over 70% for a deal by June.

• Kalshi traders place 47% odds on a deal by September 2026, while Polymarket traders are more optimistic at 65% for a deal before 2027
• The Axios report indicated countries are nearing a framework for nuclear negotiations, potentially including a moratorium on Iranian nuclear enrichment as part of a broader war-ending agreement
• Market sentiment has fluctuated significantly, with current odds higher than pre-Axios levels but lower than the April 17 peak when deal optimism was strongest

Artificial intelligence is revealing critical vulnerabilities in the U.S. military supply chain, exposing deep dependencies on Chinese-controlled materials and suppliers. The Trump administration is intensifying efforts to address these weaknesses as AI technology traces the origin of defense components and identifies security risks tied to China's decades-long targeting of American manufacturing capacity.

• The number of U.S. manufacturers supporting defense-critical areas like iron castings, magnesium castings, and forgings has dropped from over 360 to below 120 in the past decade
• Exiger CEO Brandon Daniels characterizes China's strategy as 'economic warfare' that has systematically hollowed out America's manufacturing base through forced labor and state subsidies
• The administration is pushing autonomous workflows, automation, and robotics as a path to restore domestic manufacturing capacity for critical defense systems

EDP Renewables, the world's fourth-largest wind power producer, remains optimistic about the U.S. market despite Trump administration rollbacks on renewable energy incentives. The company has secured 1.4 gigawatts of new U.S. capacity since July and plans to invest 4.5 billion euros (60% of total spending) in the U.S. over the next three years. The U.S. represents approximately 50% of EDPR's 20.5 GW total installed capacity.

• EDPR secured 1.4 GW of new U.S. capacity since Washington accelerated phase-out of renewable tax credits in July, with significant growth expected in coming months
• Company forecasts U.S. renewable generation to grow at 8% compound annual rate between 2025-2030, with renewables surpassing natural gas for first time in March (over one-third of electricity generation)
• U.S. contract prices continue rising and are 'well above previous cycles,' supporting strong returns; company is upgrading old wind farms and positioning for data center power demand

Credit Karma announced on May 7, 2026, that it will allow individuals without credit scores to open accounts for the first time, providing access to credit-building tools for 17 million American adults who are credit invisible. The platform will offer resources to help these users establish credit history and improve financial literacy.

• 17 million American adults have no credit file or insufficient credit history to generate a score, and can now access Credit Karma's platform
• Tools include Credit Karma Report, Credit Builder (converting utility/phone payments into credit history), and secured cards to establish credit
• PYMNTS research shows many credit-insecure consumers face financial strains from unforeseen expenses and lack understanding of how to improve credit scores

A Federal Reserve Bank of New York study found that surging gas prices in March 2026, driven by the Iran war and closure of the Strait of Hormuz, disproportionately impacted low-income households. While high-income households maintained consumption levels despite higher costs, low-income households cut real gasoline consumption by 7% but still faced sharp nominal spending increases, creating a K-shaped consumption pattern.

• Nominal gasoline spending rose over 15% in March 2026, with prices hitting a four-year high after the Strait of Hormuz closure disrupted about 20% of global oil supply
• Low-income households cut real gas consumption by 7% while increasing nominal spending by only 12%, compared to high-income households which reduced consumption by just 1% but increased spending by 19%
• The K-shaped consumption pattern was more pronounced than during the 2022 Russia-Ukraine war price spike, with lower-income households likely carpooling or switching to public transit

US stocks opened higher on Thursday, with the Dow gaining 0.4% and the S&P 500 and Nasdaq each rising 0.1%. The rally was driven by falling oil prices, hopes for a US-Iran deal to end conflict, and strong corporate earnings from DoorDash and Fortinet. Labor market data showed continued resilience with initial jobless claims at 200,000.

• Oil prices fell significantly: WTI crude dropped 4% to $91/barrel and Brent crude declined 3% to $97/barrel, both moving below $100 as potential US-Iran agreement raises hopes for eased supply disruptions
• Strong corporate earnings boosted sentiment: DoorDash jumped 8% on improved Q2 guidance while Fortinet surged 19% after raising its full-year billings outlook
• Labor market remains tight: Initial jobless claims rose to 200,000 (below 205,000 forecast) while continuing claims fell to 1.77 million, a two-year low, indicating limited layoffs despite job cut announcements from Meta and Nike

The Nasdaq Composite hit a record high near 26,000, up roughly 14% over the past month, driven primarily by semiconductor stocks which have surged around 60% year-to-date. The rally is fueled by surging AI infrastructure demand, with Anthropic's Q1 revenue and usage jumping 80x on an annualized basis, driving accelerated chip orders and hyperscaler capital expenditure.

• Major chip stocks posted exceptional YTD gains: SanDisk up 494%, Intel up 206%, Micron up 134%, Marvell up 103%, and AMD up 97%, driven by AI datacenter demand and supply constraints
• NVIDIA alone added roughly $260 billion in market cap in a single day, while AMD's Q1 2026 revenue hit $10.25 billion with data center sales up 57% YoY
• Favorable macro conditions supported the rally: initial jobless claims at 200,000 (below consensus), WTI crude easing near $90, and S&P 500 profit growth tracking near 25% in what Deutsche Bank called potentially one of the best earnings seasons in two decades

Investor Paul Tudor Jones stated that incoming Federal Reserve Chair Kevin Warsh will not cut interest rates and may even consider raising them, despite Warsh previously suggesting the Fed should think about lowering rates. The Fed's benchmark rate currently sits at 3.5%-3.75%, where it has remained since December, and policymakers face persistent inflation pressures from the Iran war and Trump's tariffs.

• The Federal Open Market Committee recently had the most dissents at a meeting in nearly 34 years, with members objecting to language suggesting potential rate cuts
• Futures traders are pricing in a Fed hold through the end of the year, with roughly equal slight chances of either a cut or hike according to CME Group data
• The labor market has stabilized while inflation remains elevated due to geopolitical tensions and tariff policies, complicating the Fed's policy decisions

Major Wall Street banks including JPMorgan Chase, Wells Fargo, Citigroup, and Bank of America are making a final push to reduce capital requirements under revised Basel rules before the November election. The Federal Reserve's March proposal would reduce required capital reserves by 4.8%, down from an initial 20% increase proposed in 2023, but banks seek further relief on credit card line charges and globally systemically important bank (GSIB) surcharges. Banks aim to finalize rules before potential political shifts that could bring regulators less sympathetic to industry concerns.

• Banks are targeting a new requirement to hold capital against 10% of unused credit card lines (nearly $5 trillion in unused lines existed at end of 2025), arguing it could force them to reduce credit limits and cancel unused lines, though regional banks would be exempt under simpler rules.
• Major banks want the GSIB surcharge recalculated using 2015 baseline data adjusted for economic growth rather than the Fed's proposed recent-only adjustment, which could significantly reduce their capital surcharges.
• JPMorgan Chase expects its capital requirements to actually increase under current proposals while competitors' requirements fall, creating uneven impacts despite the overall 4.8% reduction in industry capital requirements.

Billionaire hedge fund manager Paul Tudor Jones stated that the artificial intelligence-driven bull market in stocks has approximately one to two more years left to run. The comments were made during an appearance at the World Economic Forum in Davos, Switzerland.

• Jones predicts the AI bull market will continue for 'another year or two' before potentially losing momentum
• The forecast comes from one of Wall Street's most prominent hedge fund managers, giving weight to the outlook for AI-related stocks
• Comments were delivered at the World Economic Forum in Davos, a key gathering for global financial and political leaders

U.S. worker productivity grew at just 0.8% annualized in Q1 2026, slowing from a revised 1.6% in Q4 and well below the 5.2% surge in Q3. The deceleration reflects cooling productivity gains, though economists expect business investments in artificial intelligence to reverse this trend and boost future output per worker.

• Nonfarm productivity increased 0.8% annualized in Q1, missing the 1.0% forecast, while year-over-year productivity grew 2.9%
• Unit labor costs rose 2.3% in Q1 (below the 2.6% forecast) and 1.2% year-over-year, suggesting moderate wage pressure
• Economists anticipate AI adoption will enhance productivity and help control labor costs despite the current slowdown

Job cuts in April 2026 surged 38% month-over-month to 83,387, the third-highest level since the 2009 Great Recession, according to Challenger, Gray & Christmas. The increase was primarily driven by AI-related downsizing, particularly in the technology sector which announced 33,361 cuts in April alone. Meanwhile, hiring plans plummeted 69% from March, raising concerns about future employment despite strong overall job market indicators from ADP and the Bureau of Labor Statistics.

• Technology companies led all industries with 33,361 job cuts in April, bringing their year-to-date total to 85,411, with AI spending and innovation cited as the primary reasons for layoffs
• Hiring plans collapsed 69% from 32,826 in March to just 10,049 in April, signaling potential weakness ahead despite current strong payroll numbers
• The Challenger data contrasts with traditional labor market indicators, as ADP reported 109,000 private payroll additions in April and BLS showed 178,000 job additions in March

US unemployment claims rose by 10,000 to 200,000 for the week ended May 2, below the expected 205,000, indicating continued labor market stability despite high-profile tech layoffs. The data shows low layoffs are anchoring the job market, with claims remaining below 230,000 throughout the year. This comes ahead of the April employment report, which is forecast to show 62,000 new jobs added.

• Job openings stood at 0.95 per unemployed person in March versus 0.91 in February, signaling stable labor market conditions
• Employers announced 83,387 job cuts in April (up 38% from March), though year-to-date cuts of 300,749 are down 50% from the same 2025 period, with tech companies accounting for the bulk due to AI adoption
• April nonfarm payrolls expected to grow by 62,000 jobs, above the estimated break-even rate of zero to 50,000 jobs needed to keep pace with working-age population growth, with unemployment forecast to hold at 4.3%

US stock futures opened modestly higher on Thursday as markets await Iran's response to a US peace proposal aimed at ending tensions over the Strait of Hormuz. The cautious optimism follows a strong Wednesday session where the S&P 500 and Nasdaq closed at record highs, driven by easing geopolitical concerns after President Trump paused military escort missions to allow for negotiations.

• The Nasdaq rose 2% to 25,839 and S&P 500 gained 1.5% to 7,365 on Wednesday, both hitting fresh record highs, while the Dow added 612 points (1.2%) to close at 49,911
• Iran is expected to respond to the US peace proposal later today or by the weekend, though Iranian media reported the proposal contains 'unacceptable' elements despite both sides nearing agreement on a one-page memorandum
• Major earnings reports are due from Shell, McDonald's, Gilead, McKesson, Airbnb and Cloudflare, as markets balance geopolitical uncertainty with corporate fundamentals

U.S. equity indices continued their strong rally on May 7, 2026, with the S&P 500 breaking into new territory and the Dow Jones 30 approaching 50,000. Analyst Christopher Lewis suggests the markets are overextended and may be experiencing a short squeeze, recommending investors wait for pullbacks to find better entry points.

• The Dow Jones 30 is struggling with the 50,000 psychological level, with support expected around 49,500 on any pullback
• The Nasdaq 100 shows signs of being overdone, with the 28,000 level identified as a major support floor for potential buying opportunities
• The S&P 500 is trading in fresh territory above 7,300, but the analyst notes excessive 'froth' in the market that resembles a short squeeze situation

Asian stock markets surged as they returned from holidays, with Japan's Nikkei jumping nearly 6% and South Korea's market up significantly, driven by a global semiconductor boom. The rally follows Wall Street's tech-driven gains, though Asian chip and tech equipment makers are outperforming U.S. markets, with Seoul up 75% year-to-date compared to the S&P 500's 8% gain. Meanwhile, hopes for a U.S.-Iran peace deal pushed oil prices lower and supported broader market gains.

• Japan's Nikkei gained 25% year-to-date while South Korea's index surged 75%, both dramatically outpacing the Nasdaq's 11% and S&P 500's 8% advances
• Oil prices fell below $100 per barrel for Brent crude as Iran reportedly considers a U.S. peace proposal that would begin 30 days of detailed negotiations
• U.S. labor market data showed resilience with ADP private sector jobs beating expectations, setting up Friday's key payrolls report

Swiss-German firm Terra Quantum secured a U.S. Air Force contract to provide software simulating quantum-secure military communications in contested battlefield conditions. The deal comes ahead of the company's planned Nasdaq listing, which values Terra Quantum at $3.25 billion.

• The platform simulates quantum-secured communications under difficult battlefield conditions including jamming, weak signals, and limited bandwidth, allowing military testing before operational deployment
• Financial terms of the Air Force contract were not disclosed, though it is part of a longer-term cooperation between the parties
• The deal is significant amid current U.S.-Europe tensions over military cooperation, marking a transition of quantum-secure communications from research to operational capability

The traditional 'sell in May' market pattern is breaking down under Trump-era policies, with the S&P 500 averaging 9.5% gains from May to October during Trump's presidency versus just 1.3% in non-Trump years. However, the FTSE 100 continues to experience summer weakness, particularly pronounced during Trump years, due to its heavy overseas revenue exposure.

• S&P 500 gains during May-October average 9.5% in Trump years compared to 1.3% historically, driven by domestic-focused technology stocks benefiting from deregulation
• FTSE 100 generates over 80% of revenues overseas, making it vulnerable to Trump-era trade tensions while US markets benefit from domestic demand
• Options markets show aggressive positioning with oil bets pointing to potential $200 per barrel prices by August, suggesting underlying volatility despite surface-level complacency

Wall Street bonuses are projected to be flat to slightly positive in 2026, constrained by geopolitical risks from the Iran war and turmoil in private credit markets, according to Johnson Associates. While overall bonuses reached a record $49.2 billion in 2025 (up 9%), growth this year faces headwinds from elevated oil prices and inflation stemming from the conflict that began February 28.

• Investment banking, trading, and advisory roles expected to outperform with bonus increases up to 10%, driven by volatile markets, strong M&A activity, and IPO momentum
• Private credit professionals face flat to 5% bonus growth due to fundraising challenges, lower returns, and investor concerns about valuations and lending standards
• Hedge fund bonuses projected to rise 2.5-10%, while wealth management and traditional asset managers expected to see 5% increases from market recovery and competitive talent demand

US equity futures rose on Thursday, with Dow futures up 120 points (0.24%), driven by progress in Iran-US diplomatic talks, falling oil prices, and a strong earnings season. Investors are awaiting Friday's US jobs data, which could influence Federal Reserve policy decisions on interest rates.

• Iran is reviewing a US peace proposal that would gradually reopen the Strait of Hormuz and lift naval blockades, easing oil supply concerns and sending crude prices lower
• Earnings season remains exceptionally strong with 84% of S&P 500 companies (71% reported) beating analyst expectations, led by tech and AI-related stocks including Alphabet, Amazon, and Meta
• Friday's non-farm payrolls data represents the week's most critical release, as it will shape Fed rate policy outlook amid concerns about balancing growth slowdown risks against persistent inflation