General Market News

Chicago Federal Reserve President Austan Goolsbee warned that even if artificial intelligence delivers transformative economic benefits, the Fed must remain vigilant about inflation risks. He cautioned that consumer spending based on anticipated future productivity gains from AI could cause economic overheating before those gains materialize.

• Goolsbee acknowledged AI's potential, stating it 'would be lovely, wonderful, it will make us rich' if it lives up to expectations
• The Fed official emphasized the need to be 'circumspect and on the lookout for overheating' as people may spend based on expected wealth gains
• The remarks highlight central bank concerns about managing inflation expectations while technology-driven productivity improvements remain uncertain

Prediction market traders are betting on when the SEC will finalize its proposed rule to end mandatory quarterly earnings reports for companies. Traders on Kalshi give 73% odds the change will happen by April 2027, though the timeline would be unusually fast given the SEC's typical rulemaking process takes at least a year after the 60-day public comment period.

• Odds on Kalshi for rule finalization by April 2027 jumped to 73% from 46% after the SEC's formal proposal on Tuesday, while January 2027 approval stands at 57% odds
• The SEC's typical rulemaking timeline is at least one year between proposal and final adoption, making traders' bullish timeline a significant bet against historical precedent
• The proposal faces a 60-day public comment period that only begins once posted to the Federal Register, which can take days to a month, especially for proposals over 100 pages

Portugal's largest listed lender Millennium bcp reported a first-quarter net profit increase of nearly 26% to 305.8 million euros, significantly exceeding analyst expectations of 208 million euros. The strong performance was driven by an improved net interest margin, higher return on equity rising to 15.9%, and lower provisions at its Polish subsidiary Bank Millennium.

• Net profit of 305.8 million euros beat the average analyst forecast by 47%, with domestic business contributing 265.4 million euros (up 21.2%) and Polish unit Bank Millennium rising 68% to 71 million euros due to lower Swiss franc mortgage charges
• Key operational metrics improved across the board: customer loans grew 7.2% to 63.4 billion euros, non-performing exposures declined 14% to 1.48 billion euros, and cost-to-income ratio fell to 36.0% from 37.4%
• Return on equity improved to 15.9% from 13.9% year-over-year, while net interest income rose 2.4% to 738.4 million euros and fees/commissions increased 8.2% to 218 million euros

White House National Economic Council Director Kevin Hassett predicts 4% U.S. economic growth for the rest of the year, driven by an AI productivity boom, corporate tax incentives for manufacturing, and surging domestic investment. Major companies including Novartis and TSMC are making significant U.S. expansion investments, with tax policies encouraging a rush to build factories before incentives expire.

• Hassett attributes the growth surge to AI-driven productivity gains translating into corporate earnings growth and increased capital spending
• Tax incentives restoring full expensing and bonus depreciation for factory construction and equipment are creating a 'race unlike anything we've ever seen to create jobs in America'
• Major multinational corporations are pouring billions into U.S.-based semiconductor, AI, and advanced manufacturing projects, making the U.S. 'the hot place to be right now'

U.S. airlines spent 56.4% more on jet fuel in March 2026 compared to February, following U.S.-Israel strikes on Iran that effectively closed the Strait of Hormuz. Airlines spent $5.06 billion on fuel in March, up from $3.23 billion in February, forcing carriers to lower or scrap 2026 guidance as fuel is their second-largest expense after labor.

• March fuel spending was $5.06 billion, a 56.4% increase from February's $3.23 billion and 30% higher than March 2025
• Jet fuel prices exceeded $4 per gallon in some markets by April as the conflict continued and the Strait of Hormuz remained effectively closed
• Airlines expect customers to absorb higher fuel costs by early 2027, while Spirit Airlines cited the fuel crisis as derailing its mid-year bankruptcy emergence plans

A New York Fed study reveals that surging gas prices in March 2026 disproportionately impacted lower-income households, who reduced consumption significantly while higher earners maintained spending levels. Households earning under $40,000 annually increased gas spending by only 12% while cutting consumption by 7%, compared to those earning over $125,000 who raised spending by 19% with just a 1% consumption cut. This highlights the widening 'K-shaped' economic recovery where inflation hurts those least able to afford it.

• Lower-income households (under $40,000/year) cut real gas consumption by 7% during the March 2026 price spike, likely through carpooling or public transit, while high earners (over $125,000) reduced consumption by only 1%
• Gas prices jumped nearly $1 per gallon to $3.81 in March following the Iran war and have since climbed to $4.30, with overall energy prices up 56% post-pandemic
• The disparity in response is larger than during the 2022 Russia-Ukraine energy shock, reflecting Fed Chair Powell's repeated warnings that persistent above-target inflation disproportionately harms those least able to afford higher prices

The busiest week of Q1 2026 earnings season arrives with 3,213 companies reporting, as the S&P 500 is projected to deliver its sixth consecutive quarter of double-digit earnings growth at 15.1%. Tech giants including the Magnificent Seven have posted strong revenue growth driven by cloud computing and AI, though investor reactions have been mixed due to concerns over massive AI infrastructure spending.

• 84% of S&P 500 companies have beaten EPS estimates and 81% exceeded revenue expectations, both above historical averages, with blended earnings growth at 27.1%
• Information Technology sector is driving overall growth with a projected 46% expansion, while Apple reported record $111.2 billion in revenue from iPhone 17 demand
• Four S&P 500 companies (PTC, Kraft Heinz, Gilead Sciences, McDonald's) have confirmed later-than-usual earnings dates this week, which historically signals potential negative results

CNN's chief international anchor Christiane Amanpour expressed concerns about the pending merger between Paramount Skydance and Warner Bros Discovery, citing what she calls an 'ideological realignment' at CBS News under David Ellison's leadership. She warned about potential threats to editorial independence at CNN, pointing to declining viewership at CBS and reported changes to flagship program 60 Minutes since Skydance took control last summer.

• Amanpour cited CBS News's declining performance under Ellison, including 'hemorrhaging viewers' and 'potentially' destroying 60 Minutes, a top-rated, longtime money-maker for the network
• David Ellison has not detailed specific plans for CNN but says he values editorial independence, while his father, tech billionaire Larry Ellison, has reportedly discussed making changes including potentially removing certain CNN hosts
• The concerns come amid broader media pressures, with Wall Street Journal editor Emma Tucker noting that lawsuits increasingly arrive 'before you even get to publication' in what appears to be an effort to chill journalism

PJM Interconnection, the largest U.S. power grid operator serving one in five Americans across 13 states, is considering major market reforms to address electricity shortages driven by surging data center demand. The operator has outlined three potential pathways that would shift from short-term to long-term power contracts after record capacity price increases and warnings of potential shortfalls as early as 2027.

• PJM's capacity market experienced record price increases primarily due to new data center connection requests, creating demand growth not seen since the Industrial Revolution according to the COO
• The grid operator warns of potential electricity shortfalls starting in 2027 as new power supply cannot come online fast enough to meet demand, while rising power bills have drawn political scrutiny
• Three proposed reform pathways include requiring most electricity sales through long-term fixed-rate contracts, allowing stakeholders to trade reliability for price caps, or significantly shrinking the capacity market in favor of energy markets

A Federal Reserve Bank of New York report found that surging gasoline prices linked to the Middle East war are disproportionately impacting lower-income households. While wealthier households maintained steady fuel consumption by increasing spending in March, low-income households reduced real gasoline consumption despite higher nominal spending. The income-based consumption gap is larger than during the 2022 Russia-Ukraine energy price shock.

• In March, wealthy households increased spending to maintain steady gasoline consumption, while low-income households cut real fuel consumption despite spending more in nominal terms
• Lower-income households may be coping by carpooling or switching to public transit where available, according to the New York Fed analysts
• The current consumption gap between income levels is 'quantitatively larger' than the energy price shock experienced four years ago during Russia's invasion of Ukraine

U.S. crude oil inventories fell by 2.3 million barrels to 457.2 million barrels in the week ending May 1, according to the EIA, missing analyst expectations of a 3.3 million-barrel draw. Gasoline and distillate stocks also declined, while oil futures extended losses with Brent crude falling to $102.06 and WTI dropping to $95.19 per barrel.

• Crude stocks at Cushing, Oklahoma delivery hub decreased by 648,000 barrels during the week
• Gasoline inventories fell 2.5 million barrels to 219.8 million barrels, slightly exceeding the expected 2.1 million-barrel draw
• Distillate stockpiles dropped 1.3 million barrels to 102.3 million barrels, less than the anticipated 2.4 million-barrel decline, while net U.S. crude imports rose by 1.42 million barrels per day

The U.S. tariff refund process is operating more smoothly than expected, according to Swiss logistics firm Kuehne + Nagel (K+N). The system allows companies to reclaim payments for tariffs deemed illegal by the Supreme Court, with up to $166 billion in potential rebates available to importers.

• K+N is helping thousands of customers submit refund claims through the U.S. customs online portal, representing the vast majority of its U.S.-importing clients
• Companies can seek rebates on tariffs struck down by the Supreme Court after the Trump administration's broad tariffs were ruled illegal last year
• U.S. Customs and Border Protection estimates that actual refund payments will begin as soon as May 12

U.S. stock indices rallied on May 6, 2026, driven by falling interest rates amid reports of potential U.S.-Iran diplomatic progress. The Nasdaq 100, Dow Jones 30, and S&P 500 all posted gains, though analysts warn the rally appears overdone and a pullback may be warranted, particularly for the tech-heavy indices.

• The Nasdaq 100 surged but gave back some gains, with analysts preferring to buy dips around 27,500 rather than chase current levels 800 points higher
• The Dow Jones 30 tested the psychological 50,000 level and appears less overdone than other indices, making a breakout more sustainable
• The S&P 500 continued grinding higher but is viewed as overstretched, with analysts seeking better value around 7,200 rather than buying at current highs during earnings season

Wall Street surged on Wednesday, with the Dow rising 448 points (0.91%) and the Nasdaq up 0.85%, driven by optimism over a potential US-Iran peace deal and strong AI-sector earnings. Oil prices tumbled roughly 10% as geopolitical tensions appeared to ease, while chipmakers led gains after AMD's blowout earnings report fueled continued enthusiasm for artificial intelligence investments.

• West Texas Intermediate crude fell 10% to around $91 per barrel and Brent dropped 9% to near $100 as reports indicated the US and Iran were nearing a deal that could reopen the Strait of Hormuz and pause nuclear enrichment.
• AMD shares surged 18% after beating Q1 expectations and issuing an upbeat Q2 outlook, lifting the broader semiconductor sector with the VanEck Semiconductor ETF rising 4% and Intel up 4%.
• President Trump cautioned a deal was not guaranteed, warning that if Iran rejects the proposal 'the bombing starts' at higher intensity, causing equity futures to pull back slightly from earlier highs.

The EU is struggling to finalize a trade deal with the US that would eliminate duties on American imports, as President Trump threatened to raise tariffs on EU cars and trucks to 25% from 15% this week. Nine months after the deal was struck in Scotland, the European Parliament and EU governments remain divided over safeguard provisions, complicating swift implementation that could avert the escalating tariffs.

• Trump threatens to increase tariffs on EU cars and trucks to 25% from 15% this week, citing EU non-compliance with terms agreed in Scotland in July 2024
• EU lawmakers demand stronger safeguards including deal suspension if the US fails to comply, conditional tariff cuts, and ending EU concessions entirely by March 31, 2028
• Germany would be among the hardest hit by higher auto tariffs, with Economy Minister Katherina Reiche expressing hope for resolving the challenge through intense talks with US officials

U.S. stock futures are surging toward record highs as oil prices plunge 9% on reports that the U.S. and Iran are nearing a deal to end their conflict. Nasdaq futures rose 1.4% while crude oil dropped to around $93 a barrel, with investors also digesting a heavy day of corporate earnings reports including strong results from AMD driven by AI demand.

• Oil prices fell 9% to $93/barrel after reports indicated the White House is close to a memorandum of understanding with Iran to end the war and establish a framework for nuclear negotiations
• AMD shares soared in premarket trading after reporting that AI data center products comprised more than half of its quarterly revenue, lifting the broader semiconductor sector with the iShares Semiconductor ETF up 4%
• Major earnings reports today include Disney (beat estimates under new CEO), CVS Health, and Uber, with additional reports from Applovin, DoorDash, and Warner Bros. Discovery due after the close

The S&P 500 extended its record run above 7,250 as oil prices tumbled nearly 9% to $93/barrel following reports of progress toward a U.S.-Iran nuclear deal and reduced tensions in the Strait of Hormuz. Semiconductor stocks led gains, with AMD surging 20% premarket after strong earnings, while improved labor market data showed private payrolls grew by 109,000 in April, beating expectations.

• WTI crude dropped 9% to $93 and Brent fell 8% to $101 after reports the U.S. and Iran are nearing a deal including a nuclear enrichment moratorium
• AMD jumped 20% premarket on Q1 revenue of $10.25 billion and data center AI revenue of $5.78 billion (up 57%), with Q2 guidance of $11.2 billion citing 'accelerating AI infrastructure demand'
• The PHLX Semiconductor Index surged 9.4% over five days, while ADP reported April private payrolls of 109,000 (versus 84,000 expected), signaling continued labor market strength

The U.S. private sector added 109,000 jobs in April 2026, surpassing economist expectations of 99,000, according to ADP's National Employment report released Wednesday. The figure represents stronger job growth compared to March's revised gain of 61,000 positions, signaling continued employment expansion despite economic complexities.

• Education and health services led job creation with 61,000 new positions, while trade, transportation and utilities added 25,000 jobs
• Professional and business services sector shed 8,000 jobs, showing weakness in middle-market employers while small and large companies continued hiring
• ADP's chief economist noted that 'small and large employers are hiring, but we're seeing softness in the middle,' highlighting advantages for nimble small firms and resource-rich large companies

U.S. markets rose on news that the U.S. and Iran are nearing a peace deal to end their conflict, causing oil prices to fall and stocks to rally. Technology stocks led gains with the Nasdaq and S&P 500 hitting fresh records, while Disney reported strong earnings despite fewer domestic park visitors. Spirit Airlines began its wind-down process in bankruptcy court after shutting down amid surging jet fuel costs.

• Micron surged 11% after announcing new solid-state drive shipments, pushing its market cap above $200 billion for the first time with shares up 124% year-to-date
• Nvidia and Corning announced a joint venture to build three manufacturing facilities in North Carolina and Texas focused on optical technology to potentially replace copper with glass fibers in AI systems
• Spirit Airlines entered bankruptcy proceedings with a wind-down budget of approximately $217 million, with its lawyer citing the spike in jet fuel prices from the Iran war as the reason for shutdown

Private sector employers added 109,000 jobs in April, exceeding the expected 84,000 and marking an improvement from March's 61,000, according to ADP. The stronger-than-expected job growth suggests labor market stability, which reduces pressure on the Federal Reserve to cut interest rates amid persistent inflation and tariff-related economic uncertainties.

• Education and health services led job creation with 61,000 positions, while trade, transportation and utilities added 25,000, demonstrating concentrated hiring in specific sectors rather than broad-based growth
• Annual wage growth for job-stayers slowed to 4.4%, declining 0.1 percentage point from the previous period
• Small businesses (under 50 employees) added 65,000 jobs and large firms (500+ employees) added 42,000, while mid-sized companies showed weakness, reflecting what economists call a 'low-hire, low-fire environment'