May 9, 2026 Market Update

Market Recap

The U.S. stock market rose for a sixth straight week, setting a new high and downplaying the risks associated with the supply‑side energy shock still reverberating from the turmoil in the Middle East. The S&P 500 Index gained 2.3%, and the tech‑driven Nasdaq Composite Index rallied 4.5% for the week.

Strong corporate earnings—particularly from sectors tied to artificial intelligence—continue to support bullish sentiment on Wall Street. According to FactSet, analysts’ median estimate for S&P 500 earnings per share for the second quarter rose 2.1% during the month through April 30, marking the largest increase in nearly five years for first‑month‑of‑the‑quarter comparisons.

Expectations that geopolitical risk in the Middle East will ease are also contributing to the positive outlook, though largely in a relative sense. Energy exports from the Gulf remain a fraction of pre‑war levels, but investors appear to be growing more comfortable with the current situation, which does not seem to pose an immediate threat to earnings.

The bond market, by contrast, is more cautious, as concerns about higher inflation continue to ripple through the global economy. A proxy for U.S. fixed income edged higher this week but remains moderately below its pre‑war high, based on the Vanguard Total Bond Market ETF (BND).

Market Performance

Market Commentary: Stay Calm and Carry On

Jerome Powell’s term as Chair of the Federal Reserve concludes on May 15. From navigating the economic shutdown brought on by the pandemic to leading the Federal Reserve through the sharpest inflation surge in four decades, Powell’s tenure was defined by extraordinary policy challenges and dramatic shifts in market conditions.

As Powell steps down as Chairman, investors are attempting to balance slowing economic growth, geopolitical turmoil, and persistent inflation risks. Growing concerns surrounding rising debt burdens and the resilience of consumer spending continue to add uncertainty to both stock and bond markets, domestically and abroad.

Kevin Warsh is expected to succeed Mr. Powell, and Mr. Market is watching closely for any indication of how his leadership may influence inflation, labor markets, and the Federal Reserve’s independence. As for Powell, agree or disagree with his policies, credit is due for his calm and steady leadership during some exceptionally turbulent times.

In Case You Missed It. Is Bigger Better?

The combined market value of Google and Nvidia is greater than the value of all of the companies that comprise the Shanghai Composite, the world’s biggest stock market outside the U.S.