General Market News

President Donald Trump announced plans to raise tariffs on EU cars and trucks to 25% next week, claiming non-compliance with a trade deal, but did not specify the legal authority he would use. This follows the Supreme Court's February ruling that struck down his previous 'reciprocal' tariffs as illegal, creating uncertainty about the implementation of these new levies.

• The Supreme Court ruled 6-3 in February that Trump's 'reciprocal' tariffs under IEEPA were illegal, forcing him to replace them with a temporary 10% global tariff under Section 122 with a 150-day time limit
• European automakers Mercedes, BMW, and Volkswagen would be most impacted as they import a large percentage of vehicles sold in the U.S. from European plants
• The EU warned in February that its trade deal with the U.S. could be in jeopardy and postponed its planned vote on the agreement following previous tariff announcements

Major tech companies including Meta, Microsoft, Amazon, and Oracle are conducting significant layoffs while simultaneously increasing AI infrastructure spending, with 81,747 tech job cuts in Q1 2026 alone - the highest in three years. The companies claim AI tools enable smaller teams to work more efficiently, though experts debate whether AI capabilities or previous overhiring are the real driver. Wall Street reaction has been mixed as AI capital expenditures surge to a projected $769 billion among five major hyperscalers this year.

• Meta announced 6,000 canceled job openings and workforce reductions while increasing capex guidance from $115-135B to $125-145B for 2026, nearly double the $70B spent in 2025, causing free cash flow to plummet from $44B to projected $2.3B
• Block cited AI directly when cutting 20% of its workforce (4,000 employees) in February, with stock jumping 20% on the news as Morgan Stanley upgraded it to 'overweight' based on the 'audacious AI gambit'
• Anthropic research found AI has not increased unemployment in exposed fields like programming and customer service, but hiring has slowed for entry-level positions, raising concerns about future talent pipelines

U.S. President Donald Trump announced on May 1st that he will increase tariffs on European Union cars and trucks to 25%, claiming the EU has not complied with their trade agreement. The tariffs will take effect next week, though vehicles produced at U.S. plants will be exempt from the levy.

• Trump stated the tariff increase is based on the EU's alleged non-compliance with a 'fully agreed to Trade Deal'
• The 25% tariff will apply to cars and trucks imported from the EU starting next week
• Vehicles manufactured at U.S. plants will face no tariff, potentially incentivizing EU automakers to increase domestic production

UK goods exports to the United States fell approximately 25% following President Trump's April 2025 'liberation day' tariffs, which included a 10% blanket tariff on imports. The decline has persisted for over a year, pushing the UK into a trade deficit with its largest trading partner for three consecutive months as of early 2026.

• UK exports to the US dropped by £1.5 billion (24.7%) after tariffs were introduced, with car exports particularly affected and remaining below pre-tariff levels
• Trump announced removal of tariffs on Scotch whisky 'in honor' of King Charles, though the industry represents only 23% of Scottish goods exports and will not resolve the overall trade deficit
• UK exporters face a 'triple squeeze' from higher tariff costs, increased employment taxes, and input price pressures, eroding margins and international competitiveness

Inflation could potentially surge to 10%, echoing the June 2022 peak of 9.1%, driven by soaring energy costs from the Iran war and global supply chain disruptions. Diesel prices have jumped 45% since the conflict began, while the World Bank projects energy prices will surge 24% in 2026 to the highest levels since Russia's 2022 Ukraine invasion. The situation is worsened by 800-2,000 ships trapped near the Strait of Hormuz, creating prolonged shipping backlogs that will take months to clear.

• Diesel fuel prices have increased 45% and gasoline 40% since the Iran war started, forcing trucking companies (which move 73% of U.S. freight) to pass costs to consumers
• Brent crude oil has surged from $55 at year-start to $126, with the World Bank warning energy prices will jump 24% in 2026 and fertilizer costs will also spike, driving up food prices
• The Strait of Hormuz blockade has trapped between 800-2,000 ships, creating a backlog that will persist for months even after the conflict ends, prolonging supply chain disruptions and imported goods inflation

Biotech M&A is surging in 2026, with first-quarter deal value reaching $84 billion, nearly double the prior year. Large pharmaceutical companies are aggressively acquiring smaller firms to replenish pipelines before major patent expirations, particularly blockbuster drugs losing exclusivity between now and 2028. If the current pace continues, total 2026 deal value could exceed $250 billion, the second-highest on record.

• Over $300 billion in pharmaceutical revenue faces loss of exclusivity in the next five years, with Merck's Keytruda (over half its revenue) losing patent protection in 2028
• Eli Lilly, Gilead, and Merck have been the biggest spenders, with Lilly alone deploying over $35 billion through April 29, fueled by strong cash reserves of $7.27 billion
• Mid-size deals under $10 billion dominate as companies make multiple bets focusing on oncology, obesity, cardiovascular disease, and AI-driven drug discovery to offset impending patent cliffs

US stocks rose on Friday, with the Dow gaining 180 points (0.36%), the S&P 500 up 0.54%, and the Nasdaq up 0.68%, driven by strong corporate earnings, particularly from Apple. Oil prices eased after Iran sent new negotiation proposals, with WTI crude falling 2% to above $102 per barrel, though geopolitical and economic risks remain.

• Apple reported better-than-expected results with strong iPhone 17 and MacBook Neo demand, while Atlassian surged nearly 25% on raised annual guidance and Roblox dropped over 21% after cutting its bookings outlook
• Major indexes capped their best monthly performances since 2020, though historical data shows the S&P 500 averages only 2% returns from May to October versus 7% from November to April
• First-quarter US GDP grew at 2% annualized pace, but underlying weakness appeared in consumer spending growth and declining personal savings rates, raising sustainability concerns

The Dow Jones futures surged 200 points on May 1, 2026, driven by Apple's strong earnings report which beat revenue and earnings estimates, pushing the stock up over 3% in pre-market trading. The rally follows record highs for the S&P 500 and Nasdaq on Thursday, with investor sentiment boosted by solid corporate earnings and easing geopolitical concerns as April concluded on a strong note.

• Apple stock jumped 3%+ after beating earnings and revenue expectations despite soft iPhone sales, providing strong enough forward guidance to pull major indices higher
• June E-mini Dow Jones futures are positioned to break above the April 21 high of 50,043 and potentially challenge the February 10 record of 50,932
• Crude oil prices declining is viewed as a key supportive factor for the rally, as lower oil improves inflation outlook and encourages rate cut speculation, though any spike in oil could quickly derail momentum

Two Federal Reserve regional presidents, Neel Kashkari and Beth Hammack, explained their dissenting votes against the latest Fed statement, objecting specifically to language suggesting the next interest rate move would be a cut. The 8-4 vote represented the largest number of dissents at a Fed meeting since 1992, though dissenters supported keeping rates unchanged.

• Kashkari and Hammack both opposed the statement's 'easing bias' or forward guidance suggesting rate cuts, citing recent economic and geopolitical uncertainty
• The decision passed with 4 dissenting votes, marking the most dissents at a Federal Reserve meeting in over 30 years (since 1992)
• Dissenters agreed with holding rates at current levels but disagreed with signaling the direction of future policy moves

Jerome Powell will remain on the Federal Reserve Board of Governors after his term as Fed chair ends, becoming the first Fed chair to do so since 1948. This decision comes amid unprecedented division within the Fed, with four members dissenting at the most recent meeting where rates were held at 4%. The move provides institutional continuity during a period of rising inflation, oil price surges, and weakening consumer confidence as Kevin Warsh prepares to assume the chair role.

• Four Fed members dissented at the recent meeting (one voting to cut rates, three objecting to statement wording), marking the most divided Fed 'in a long time' according to analysts
• Core PCE inflation reached 129.28 in March 2026 (up 1% month-over-month), while WTI crude spiked to $105.20 per barrel (up 77.62% year-over-year) and consumer sentiment fell to 53.3
• Powell pledged not to act as a 'shadow Fed chair' under successor Kevin Warsh, though his presence at the same table creates potential optics challenges for future policy debates

Chip stocks experienced a dramatic reversal in April 2026, with Nasdaq's semiconductor index surging 35.2% after declining 6.3% in March. The rally followed easing investor concerns about massive AI infrastructure spending by hyperscalers, supported by strong earnings from major chipmakers including Intel, AMD, and Nvidia. Analysts describe the month's performance as 'historic,' though some warn the market may be overlooking supply chain risks from the Iran war.

• Nasdaq's PHLX Semiconductor Sector Index rose 35.2% in April 2026, marking winning streaks not seen since the 1970s according to analysts
• Intel had its best single-day performance last Friday on stronger-than-expected earnings, while AMD and Nvidia also posted significant gains
• Despite the rally, supply chain bottlenecks persist due to the Iran war, including curtailed helium exports critical for chipmaking and flight path disruptions affecting equipment delivery

US stock index futures rose modestly on Friday following April's exceptional rally, which saw the S&P 500 gain 10.4%, its best monthly performance since 2020. Apple shares climbed 3% premarket on strong earnings, while Roblox plunged 21% after slashing annual guidance. Markets are entering the historically weaker May-October period at elevated valuations.

• S&P 500 surged 10.4% in April (best since Nov 2020), Nasdaq jumped 15.3% (best since April 2020), and Dow rose 7.14%, closing above 7,200 for the first time
• Apple reported record $111.2B quarterly revenue (up 17% YoY) with iPhone sales up 22% to ~$57B and Services hitting an all-time high of ~$31B, despite flagging rising memory costs
• Roblox cut full-year bookings guidance to $7.33B-$7.6B from $8.28B-$8.55B due to lower engagement from age-gating measures and child safety legal settlements; oil remains elevated at $111.63/barrel (Brent July contract)

The S&P 500 closed April 2026 at a record high with gains exceeding 10%, marking its best monthly performance since November 2020. Strong corporate earnings and AI infrastructure investment offset concerns about oil prices hitting four-year highs above $120/barrel amid Iran conflict. The rally was led by technology and communication services sectors, though Federal Reserve Chair Powell warned that rising energy costs could sustain inflationary pressures.

• S&P 500 rose over 10% in April, its fifth consecutive weekly gain, while Nasdaq posted its largest monthly advance since April 2020
• Major tech firms (Alphabet, Amazon, Microsoft, Meta) collectively invested approximately $130 billion in AI data center infrastructure, driving sector strength
• Oil volatility pushed Brent crude above $120/barrel and U.S. gasoline to $4.30/gallon (up $0.27 in one week), with Fed signaling caution on inflation outlook

A global shortage of base oils, critical components for high-performance lubricants used in luxury and supercar engines, is escalating due to ongoing disruption through the Strait of Hormuz amid the Iran war. The Gulf region supplies 20% of global Group III base oils and accounts for 72% of European imports, with analysts warning stocks could run dry within a month if shipping remains disrupted.

• Group III base oil prices in northern Europe have surged nearly 100% since the conflict began, reaching record highs as Iran missile strikes damaged Shell's Qatar facility and producers declared force majeure
• South Korea, a major base oil exporter, imposed mandatory export caps to protect domestic supply, while the U.S. faces sustained pressure until at least 2027 with 44% of supply typically coming from the Persian Gulf
• The Independent Lubricant Manufacturers Association warned U.S. lawmakers there are 'no clear near-term solutions,' with disruptions rippling across automotive, industrial, aviation, and marine sectors

Huawei expects its AI chip revenue to surge at least 60% in 2026, reaching approximately $12 billion compared to $7.5 billion in 2025, driven by strong demand from Chinese companies for domestic chip alternatives. The growth is fueled by orders for its latest Ascend processor 950PR, which entered mass production in March.

• Revenue projected to reach $12 billion in 2026, up from $7.5 billion in 2025, representing at least 60% growth
• Majority of orders are for the Ascend 950PR processor, which began mass production in March 2026
• Huawei plans to launch an upgraded version of its 950DT processor in the fourth quarter of 2026

British discretionary retail sales fell 1.6% year-on-year in April, marking the weakest April performance in a decade outside of the pandemic, according to accountancy firm BDO. Weak consumer confidence and rising living costs driven by higher fuel prices related to the Iran war weighed heavily on spending. Sales declined across fashion, homewares, and lifestyle categories for the first time since March 2018.

• April typically sees a seasonal lift in retail sales, making the decline particularly concerning for retailers according to BDO's head of retail and wholesale
• Rising fuel prices due to the Iran war drove up costs of essentials from an already high base, further straining household budgets
• The Confederation of British Industry reported the sharpest year-on-year decline in retail sales in more than 40 years amid inflation fears

U.S. military officers at a training facility in Germany highlighted the strategic benefits of American troop presence in the country, one day after President Trump said he was reviewing whether to reduce the approximately 35,000 active-duty personnel stationed there. Officers emphasized the importance of deterring adversaries, training with NATO allies on European terrain, and learning drone warfare lessons from the nearby Russia-Ukraine conflict.

• Germany hosts about 35,000 U.S. active-duty personnel and serves as the U.S. military's largest European footprint, including the Hohenfels training facility spanning 163 square kilometers
• U.S. troops are actively studying drone use and electronic warfare tactics observed in the Russia-Ukraine war, with officers noting 'it is nearly impossible to hide' from constant aerial surveillance
• Officers stated that training with NATO allies builds critical interoperability for potential conflicts, though they declined to comment directly on Trump's potential troop reduction plans

The US economy grew at a 2% annualized rate in Q1 2025, slightly below expectations, while jobless claims fell to 189,000—the lowest since 1969. Core inflation remained elevated at 3.2% year-over-year in March, prompting the Federal Reserve to keep interest rates unchanged as it balances a strong labor market against persistent price pressures.

• Initial jobless claims dropped to 189,000, a 55-year low, while continuing claims fell to 1.79 million, reflecting a 'low-hire, low-fire' labor market with unemployment at 4.3%
• GDP growth of 2% came in below the 2.2%-2.3% forecast as consumer spending cooled due to higher prices and energy cost spikes tied to the Iran conflict
• Stock markets rallied sharply with the Dow surging over 800 points despite sticky inflation, as investors bet on sustained economic expansion supported by strong corporate earnings

US stocks surged on Thursday with the Dow jumping 790 points (1.62%) and the S&P 500 and Nasdaq hitting record highs, driven by strong corporate earnings from Caterpillar and Alphabet. The rally capped the best monthly performance in years for major indexes, with the S&P 500 up over 10% in April despite elevated oil prices and persistent inflation concerns.

• Caterpillar beat earnings expectations and raised annual revenue guidance, while Alphabet reported strong Q1 revenue and boosted 2026 capex guidance to as much as $190 billion
• April marked exceptional monthly gains: S&P 500 up 10% (best since Nov 2020), Nasdaq up 15% (best since April 2020), and Dow up 7% (best since Nov 2024)
• US GDP grew 1.7% in Q1 and jobless claims hit their lowest since 1969, though oil prices remain elevated around $114/barrel for Brent crude and inflation persists above 3%

The Nasdaq Composite surged 15.29% in April 2026, marking its best month since April 2020 at the start of the Covid pandemic. Strong earnings from major tech companies like Alphabet, Amazon, and Meta drove the rally, helping the sector recover from a difficult start to the year marked by AI disruption fears.

• Alphabet climbed 34% in April, its best month since going public in 2004, while chip stocks Marvell and Broadcom surged 53% and 74% respectively
• Intel stock doubled during the month, representing the best performance in the company's 55-year history, driven by rising data center demand
• The April rally reversed earlier losses, with the Nasdaq now up 7% year-to-date after being down roughly 7% at the end of March