Weekly Market Update – May 8, 2026

Quick Takes

• U.S. financial markets closed out the week on a strong note, with stocks pushing higher, bonds holding steady, and fresh economic data painting a mostly positive picture for investors.
• Wall Street posted broad gains as the S&P 500 rose +2.3%, the Nasdaq Composite surged +4.5%, and the Russell 2000 gained +1.7%. Emerging markets also delivered strong returns with the MSCI Emerging Markets Index surging +6.7%.
• U.S. employers added 115,000 jobs in April, well above expectations, and the unemployment rate held steady at 4.3%. Factory orders and construction spending data also surprised to the upside.

Source: Bloomberg. Data as of May 8, 2026.
Price Returns for Equity, Total Returns for Bonds.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.

Stocks rally to new highs as jobs, earnings shine

U.S. financial markets closed out the week on a strong note, with stocks pushing higher, bonds holding steady, and fresh economic data painting a mostly positive picture for investors. Here’s a look at the key market and economic developments last week.

U.S. Stocks: Tech and earnings drive record highs

Wall Street posted broad gains as investors reacted to a stronger-than-expected jobs report, upbeat corporate earnings, and continued enthusiasm around artificial intelligence (AI). For the week, the S&P 500 rose +2.3%, the Nasdaq Composite surged +4.5%, and the Russell 2000 gained +1.7%.

Both the S&P 500 and Nasdaq closed Friday at fresh record highs—marking their 15th and 11th records of the year, respectively. The S&P 500 and Nasdaq are each riding six-week winning streaks, while the small-cap Russell 2000 has logged seven straight weeks of gains.

Technology stocks remain the market’s main engine, buoyed by strong AI-related demand and the sector’s outsized influence on major indexes. Investor sentiment also got a lift from falling oil prices, with U.S. crude dropping $8.25 over the week to $94.50 per barrel.

Corporate earnings have been another major tailwind. About 84% of S&P 500 companies have beaten first-quarter earnings expectations, according to FactSet, with nearly 90% of companies already reporting. Overall earnings growth is running at 27.7%, the fastest pace since late 2021.

Those gains came despite elevated geopolitical tensions in the Middle East, following U.S. retaliatory strikes on Iranian military sites tied to incidents in the Strait of Hormuz.

International Stocks: Emerging markets steal the spotlight

Stock performance outside the U.S. was mixed but generally positive. In developed markets, the MSCI EAFE Index rose +0.9% for a second straight week.

• Japan stood out during a holiday-shortened trading week. The Nikkei 225 jumped +5.4%, hitting a record high, while broader Japanese indexes posted solid gains as well. 
• In Europe, results were uneven: the MSCI Europe Index gained +0.3%, the U.K. market fell -1.3%, and German stocks slipped even as factory orders in Germany jumped +5.0% in March.

Emerging markets delivered much stronger returns. The MSCI Emerging Markets Index surged +6.7%, rebounding sharply from the prior week’s decline. 

• Semiconductor-heavy markets led the way, with Taiwan up 8.7% and South Korea soaring 17.6%.
• Chinese stocks also advanced after markets reopened following early May holidays, supported by faster-than-expected growth in China’s services sector. A slightly weaker U.S. dollar helped boost non-U.S. assets overall.

Bonds: Yields steady as rate cuts look unlikely

Bond markets were relatively calm. Treasury yields ended the week little changed, with the 2-year Treasury up +1 basis point at 3.88%, while the 10-year yield slipped to 4.35% and the 30-year yield eased to 4.93%, both down -2 basis points over the week.

Investors continue to see a very low chance that the Federal Reserve will cut interest rates this year. If anything, the odds of a future rate hike appear comparable to the odds of a cut.

The Bloomberg U.S. Aggregate Bond Index posted a +0.3% gain, recovering from a loss the week before. International bonds performed slightly better, with the Bloomberg Global Aggregate Ex-U.S. Bond Index rising +0.4% for a second straight week.

(Bond prices and yields move in opposite directions.)

Economy: Jobs strong, sentiment weak

Economic data sent mixed signals. On the positive side, U.S. employers added 115,000 jobs in April, well above expectations, marking the strongest two-month stretch for job growth since 2024. The unemployment rate held steady at 4.3%, pointing to continued labor market resilience.

Manufacturing and construction data also surprised to the upside. Factory orders rose +1.5% in March, and construction spending increased 0.6%, led by strength in new single-family housing projects.

Consumers, however, appear far less optimistic. The University of Michigan’s consumer sentiment index plunged to 48.2 in early May, the lowest reading on record, highlighting ongoing concerns about the broader economic outlook.

The Bottom Line

Stocks—especially tech-driven markets at home and abroad—continue to power higher, supported by strong earnings and resilient job growth. Bonds remain range-bound as investors adjust expectations for interest rates, while economic data shows a clear divide between solid business activity and deeply pessimistic consumers.

Chart of the Week

The April Employment Situation Report delivered a second straight upside surprise, after March’s huge upside surprise. U.S. employers reported Nonfarm Payrolls growth of +115,000 for the month, far above the +75,000 new payrolls Wall Street expected. This follows March’s +185,000 jobs lost (which was revised higher from the originally reported +178,000). That is the first back-to-back monthly payrolls gain in nearly a year. On the downside, the February nonfarm payrolls were revised lower to -156,000 from -133,000. In April, employers added jobs in a range of sectors. Healthcare and social assistance, which has been powering the overall job market, added +54,000 jobs. Retail added +22,000 jobs, with the help of higher employment in warehouse clubs and supercenters. Transportation and warehousing employment increased by +30,000 in April, but is down since reaching a peak in February 2025. Federal government payrolls were down -9,000 in April. They are now down by nearly -12%, or -348,000 jobs, since a recent peak in October 2024. The Unemployment Rate remained steady at +4.3% (unrevised) as expected. The Labor-Force Participation Rate, which is the share of Americans working or looking for work, slipped to 61.8% from an unrevised 61.9%, which is its lowest level since the fall of 2021. The Employment-Population Ratio decreased to 59.1% from 59.2% the prior month. Average Hourly Earnings (AHE) rose +0.2%, unchanged from the unrevised level in March, which was below expectations for a +0.3% rise. On an annual basis, AHE were up +3.6%, below expectations for +3.8%, but up from the +3.4% annual rate the prior month (revised lower from +3.5%). The Fed would like to see wage growth slow to around +3% annually or less, a level it sees as consistent with low inflation. Average Weekly Hours Worked ticked up to 34.3 hours from 34.2 the prior month which is where they were forecasted to remain. The bottom line is the April employment report was solid, following the stellar March report.

U.S. Adds 115,000 Jobs in April with Solid Hiring Across Sectors

Nonfarm Payrolls, monthly change

Source: Labor Department, The Wall Street Journal.
Notes: Seasonally adjusted.

The Week Ahead

After heavy economic calendars the past two weeks, this week lightens up some. It opens slowly with just Existing Home Sales for April on Monday. The headline event is likely to be the April Consumer Price Index (CPI) released by the Bureau of Labor Statistics (BLS) on Tuesday. Wall Street is expecting core inflation to hold steady at an annual rate of 2.6%. Tuesday also brings Small Business Optimism from the National Federation of Independent Business (NFIB). More inflation data comes on Wednesday when the BLS releases the Producer Price Index (PPI) on Wednesday, along with Import and Export Prices and the usual weekly MBA Mortgage Applications. The Census Bureau releases Retail Sales data on Thursday, along with the weekly report on Jobless Claims from the Department of Labor. Friday wraps up with the Federal Reserve Bank of NY release of Empire State Manufacturing, plus Industrial Production and Capacity Utilization from the Federal Reserve.

Nine S&P 500 companies report results next week, including Constellation Energy on Monday, Cisco Systems on Wednesday, and Applied Materials on Thursday. 

The initial public offering (IPO) market will also be in the spotlight. AI chipmaker Cerebras Systems is expected to get a valuation as high as $3.5B. Other anticipated IPOs include geothermal company Fervo Energy and Blackstone Digital Infrastructure Trust, highlighting continued investor appetite for AI and data center themes.

 Also on Thursday, President Donald Trump is scheduled to meet with President Xi Jinping in China. The leaders of the world’s two largest economies are expected to discuss trade deals as well as the war with Iran.

Did You Know?

FREIGHT WEIGHT – GLP-1 weight-loss drugs have just a 12% penetration rate with US adults, but studies show they’ve already caused a -3% drop in total caloric food demand. This drop in demand translates to roughly 3 million fewer truckloads of food and beverage freight per year. (Source: FreightWaves)

RECORD EXPORTS – The Iran war has caused a massive shift in where countries are getting their crude oil. Per the latest US Energy Information Administration (EIA) Petroleum Status Report, last week was the first time the US exported more crude than it imported since at least 1991. (Source: EIA)

LAST FOR BONDS – With the S&P 500 up +14.75% annualized during his tenure, Jerome Powell is set to go down as the third best out of six Fed chairs since 1978 when it comes to stock market performance. However, the +1.94% annualized total return for the Bloomberg US Aggregate Bond Index during his tenure ranks last. (Source: Bloomberg)

This Week in History

REALDEAL – On May 8, 1886, at the soda fountain of Jacob’s Pharmacy in Atlanta, Dr. John S. Pemberton sold the first glass of Coca-Cola. Its original popularity might have stemmed in part from the fact that it contained trace amounts of real cocaine and an extract from the African kola nut, another stimulant. (Source: The Wall Street Journal)

Economic Review

• The ISM Services PMI dipped to 53.6% in April from 54.0% the prior month (unrevised). That is the 22nd consecutive month in expansion, but was a tick below expectations to come in at 53.7%. Service-oriented companies, such as restaurants and retailers, employ the majority of Americans. To be sure, this report was mixed. The good: the Business Activity/Production component increased to 55.9% from 53.9%, Employment rose to 48.0% from 45.2%, and Supplier Deliveries jumped to 56.8% from 56.2%. The bad: the New Orders index fell to 53.5% from the 60.6% surge the prior month, which was the fastest pace in four years, and the Backlog of Orders component dipped to 53.0% from 53.6%. The ugly: the Prices index held steady at 70.7%, marking the 17th consecutive month above 60.0% and matches the largest one-month increase in 13 years. Overall, the report showed that growth in the important service sector economy remained in expansion with no material trend changes from the prior month.
• The final April S&P Global U.S. Services PMI edged higher to 51.0, up from 49.8 in March, which was its first dip into contraction since January 2023. That was slightly below expectation to come in at the 51.3 preliminary ‘flash’ reading two weeks ago. A year ago it was 50.8. New Business (New Orders) fell for the first time in two years, with firms citing heightened client caution tied to geopolitical tensions, elevated energy costs, and renewed tariff uncertainty. The slowdown was most evident in consumer-facing services, where higher prices continued to curb discretionary spending, while financial services also reported weaker demand amid market volatility and interest-rate uncertainty. Employment held up, but only modestly. Service providers continued to add staff in April, including a greater reliance on part-time workers. Inflation pressures remain uncomfortably sticky. Input Costs inflation stayed elevated, driven by higher fuel, gas, and wage costs, prompting firms to keep raising selling prices. The rise in input expenses led to another sharp increase in Output Prices over the month. Firms commonly attributed higher output prices to efforts to offset some of the adverse impact on profit margins of increased input costs. Taken together, S&P Global economists said the April survey is consistent with sub–trend GDP growth of roughly 1% annualized, with downside risks building if New Orders and confidence fail to stabilize.
• The preliminary reading of the University of Michigan Consumer Sentiment Index dropped to 48.6 in May from a final reading of 49.8 the prior month, missing expectations for a decline to 49.5. If it holds it will be the lowest reading on record for the index, which began in 1978. In the same period a year ago, the index stood at 52.2. The Current Economic Conditions component fell to 47.8 from 52.5 the prior month, and far below expectation to fall to 52.0. The Consumer Expectations component improved to 48.5 from 48.1 the prior month, beating expectations to come in at 48.2. One-year inflation expectations moderated to 4.5%, below expectations to come in at 4.8%. The five-year inflation expectations were down a tick to 3.4% from 3.5% the prior month, where it was expected to remain. 
• Outstanding U.S. Consumer Credit increased by $24.9 billion in March (+3.8%), well above expectations for a +$13.720 billion increase, and up from $8.845 billion (+2.1%) the prior month (revised down from the initially reported +$9.484 billion). That is the largest increase in a year. Growth for Revolving Credit, such as credit cards, rose +$10.0 billion (+9.1%) for the month, following a +$0.4 billion (+0.3%) increase the previous month. Nonrevolving Credit, which tends to be much less volatile than revolving credit and includes auto as well as school loans, jumped +$14.8 billion (+4.7%) following the prior month’s +$8.5 billion (+2.7%) increase. The data from the Federal Reserve is not adjusted for inflation and does not include mortgage loans, which is the largest category of household debt.
• The Bureau of Labor Statistics reported the Job Openings Labor Turnover Survey (JOLTS) showed that Job Openings fell to 6.886 million in March, down from 6.922 million the prior month after being revised up from 6.882 million, and below Wall Street estimates for 6.850 million. The pullback in openings was driven primarily from a decline in professional/business services. The Hiring Rate rose to 3.5 from 3.1 the prior month. It typically ranges from 3.7% to 4.0% in a strong economy. The Number of People Quitting Jobs was 3.171 million, down from 3.046 million the prior month (revised up from 2.974 million). The record was 4.5 million job quitters in late 2021. The Quits Rate ticked up to 2.0% from an unrevised 1.9% the prior month, which is where it was expected to remain. The Layoffs Rate was up a tick to 1.2% from 1.1%, remaining below the 1.4% annual average from 2010 to 2019.
• According to the US Census Bureau, the US Trade Deficit for March widened to -$60.3 billion from -$57.8 billion in February (revised from -$57.3 billion), a 4.9% change. That was better than the -$61.0 billion deficit Wall Street expected. Smaller trade deficits help contribute to economic growth (GDP), while larger deficits inhibit growth. Exports were $320.9 billion, a +$6.2 billion increase from the prior month (+2.0%) and a new all-time high. Imports were $381.2 billion, or +$8.7 billion more than February (+2.3%). Adjusted for inflation, real goods deficit increased by $5.7 billion (6.7%) to -$90.8 billion. Overall, the report hasn’t yet fully captured the increase in U.S. crude oil exports as a result of the Strait of Hormuz blockade, which should be considerably higher in the next report and a boost for Q2 GDP growth forecasts.
• The Commerce Department reported that Factory Orders ramped up +1.5% in March, easily beating expectations to rise +0.6% and up from +0.3% the prior month (after being revised higher from 0.0%).  Factory Orders Excluding Transportation were up +1.6% for a second straight month (after the prior was revised higher from the originally reported +1.2%), beating expectations to rise +1.3%. The final read for March Durable Goods Orders (long-lasting items such as televisions, appliances, and transportation equipment) was +0.8%, unchanged from the advance report two weeks earlier, and where they were expected to stay. That followed a -1.2% drop the prior month. Durable Goods Orders Excluding Transportation were up +0.9%, also unchanged from the advance reading but down from the prior month’s +1.2% rise. The important Core Capital Goods Orders (capital goods excluding volatile sectors like transportation and defense), and a proxy for business spending, jumped +3.4%, a tick above the +3.3% advance reading and more than double the expected +1.6% reading the prior month. Core Capital Goods Shipments, which are factored into GDP, rose +1.2%, unchanged from the +1.3% preliminary reading and compared to a +1.3% rise the month before. The inventory-to-shipments ratio was 1.51 compared to 1.52 the month before. A key takeaway from the report is that factory orders activity ramped up in March, driven by widespread strength that was punctuated by a big increase in business spending.
• The Census Bureau reported Wholesale Inventories rose +1.3% to $932.8 billion in March, just below expectations for a +1.4% rise which is where they were in the preliminary reading. Year-over-Year (YoY) inventories were up +2.9%, above the +1.9% annual rate the prior month. That is well below the typical +4% to +6% annual increase in strong economies. Inventories are goods produced for sale that have not been sold yet. Wholesale Trade Sales rose +2.8% to $772.2 billion, after rising +2.6% the prior month (revised down from +2.7%), and easily beat expectations for a +1.8% increase. YoY sales were up +8.8%, up from the +8.2% annual rate the prior month. Wholesale inventories data isn’t adjusted for inflation. The Inventory-to-Sales Ratio ticked down to 1.22 months from 1.25 months. The ratio reflects how long it would take a company to sell all the goods sitting on warehouse shelves.  
• The Commerce Department reported Construction Spending for February declined -0.2%, better than the -1.9% in the previous month after it was revised sharply lower from the originally reported -0.3%. Construction Spending for March jumped +0.6%, better than the +0.3% Wall Street expected and up from the -0.2% in February. On a year-over-year basis, Construction Spending was up +1.6% in March, up from the +0.4% annual rate in both January and February. Total Private Construction was up +0.8% in March following a -0.2% decrease in February and -2.6% drop in January. Total Public Construction was down -0.2% for the latest month, versus -0.3% and +0.5% in February and January, respectively. Private Residential Spending rebounded +1.7% in March following declines of -0.1% and -4.6% in the previous two months. Private Nonresidential Spending was down -0.2% in March versus -0.4% and 0.0% readings the previous two months. The report showed that Single-Family Construction was up +2.7% in March following +1.6% the month before. The key takeaway is that the strength in March was concentrated in the residential sector and particularly in new single-family construction. 
• The Commerce Department reported New Home Sales for March rose +7.4% month-over-month to a seasonally adjusted annual rate of 682,000 units, versus a +8.9% increase of 635,000 units the prior month (unrevised). The data series tends to be volatile month-over-month and are often revised. Wall Street was expecting a +3.0% decline to 652,000 units. New Home Sales remain far below the recent peak of over 1 million units in August 2020, but are running above the pre-pandemic average of 600,000. Year-over-year, sales of new homes were up +3.3% following a -1.1% annual rate the prior month. The months of supply at the current rate of sales was 8.5, down from 9.1 the prior month and 9.2 months a year ago. By region, for the month sales rose +11.1% in the South and +80.0% in the Northeast, but fell -5.0% in the Midwest and -3.5% in the West. The Median New Home Price decreased -6.2% to $387,400 from the prior year. Weekly MBA Mortgage Applications fell -4.4% for the week ending May 1, after slipping -1.6% the prior week. The Purchase Index fell -3.7% after inching up +1.2% the prior week. The Refinance Index dropped -5.0% after a -4.4% fall the prior week. The average 30-Year Mortgage Rate rose to 6.45% from 6.37% the prior week. 
• Weekly Initial Jobless Claims rose by +10,000 to 200,000 for the week ending May 1, which was far better than expectations for 205,000. The prior week was revised up by +1,000 but still marked the lowest level since 1969. The number of people already collecting unemployment claims (i.e., Continuing Claims) fell by -10,000 to 1,766,000 for the week ending April 24, which was better than expectations for 1,800,000. The prior week’s reading was revised lower by -9,000.

Asset Class Performance

Source: Bloomberg.
Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange-traded funds recommended by The Retirement Planning Group. The performance of those funds may be substantially different from the performance of the broad asset classes and to proxy ETFs represented here. US Bonds (iShares Core US Aggregate Bond ETF); High‐Yield Bond (iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (Vanguard Total International Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 Value ETF); Mid Growth (iShares Russell Mid-Cap Growth ETF); Mid Value (iShares Russell Mid-Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares US Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by 24% US Bonds, 10% International Bonds, 6% High Yield Bonds, 13.8% Large Growth, 13.8% Large Value, 3.6% Mid Growth, 3.6% Mid Value, 1.2% Small Growth, 1.2% Small Value, 16.8% International Stock, 4.2% Emerging Markets, 1.8% Real Estate.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.