Market View: Week of May 01, 2026
ECONOMIC REVIEW¹
March’s Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge, increased 0.7% month-over-month (MoM) and 3.5% year-over-year (YoY).
Core PCE, which removes the volatile food and energy categories, rose at a more modest rate of 0.3% but remained elevated at 3.2% over the last year.
The increase was primarily driven by energy and related goods, as oil prices surged in March following the onset of the Iran conflict.
The Employment Cost Index (ECI) rose 0.9% in the first quarter, slightly above expectations, and is up 3.4% over the past year.
Wage growth over the last year has been mostly consistent, signaling no indications of inflationary pressures coming from the labor market.
The ISM Manufacturing PMI remained in expansion territory for a fourth consecutive month in April, holding steady at 52.7.
While the prices paid index moved higher and employment remained subdued, both activity and new orders continued to show resilience.
The Federal Open Markets Committee (FOMC) left interest rates unchanged in the 3.50%-3.75% range.
o The Fed remains in a wait-and-see approach as it assesses evolving inflationary pressures stemming from disruptions in the Strait of Hormuz and elevated energy prices.
The initial estimate of first-quarter GDP growth came in at 2.0% annualized, slightly below expectations of 2.3%.
o The reading marked a notable improvement from the 0.5% pace in Q4, which was impacted by the government shutdown.
Business investment on tech-related infrastructure was particularly strong, rising 10.4% on an annualized basis, while consumer spending remained intact and government spending normalized.
How does the most recent economic data impact you?
Elevated energy prices stemming from the Iran war will keep the Fed on hold, with little urgency to ease policy given a labor market that has seen improvement in recent months. At the same time, Q1 economic growth remained broadly supportive, showing no clear signs of underlying weakness, despite higher gasoline prices for consumers.
A LOOK FORWARD¹
This week, investors will be closely watching labor market reports, new home sales, and services sector data.
How does this week’s slate of economic data impact you?
Following last month’s much stronger-than-expected labor market report, April data is anticipated to moderate but remain positive. Continued signs of stabilization after the weakness observed late last year and earlier this year is a welcome sign but could further delay expectations for when the Federal Reserve may begin cutting interest rates.
MARKET UPDATE²
| Market Index Returns as of 5/1/26 | WTD | QTD | YTD | 1 YR | 3 YR | 5 YR |
|---|---|---|---|---|---|---|
| S&P 500 | 0.92% | 10.82% | 6.02% | 28.72% | 22.29% | 13.21% |
| NASDAQ | 1.12% | 16.35% | 8.25% | 40.57% | 28.53% | 13.29% |
| Dow Jones Industrial Average | 0.55% | 6.90% | 3.49% | 21.84% | 15.82% | 9.97% |
| Russell Mid-Cap | 0.40% | 7.16% | 8.55% | 22.92% | 16.79% | 7.68% |
| Russell 2000 (Small Cap) | 0.94% | 12.73% | 13.73% | 41.01% | 19.20% | 5.85% |
| MSCI EAFE (International) | 0.98% | 7.81% | 6.48% | 23.24% | 15.79% | 8.90% |
| MSCI Emerging Markets | -0.52% | 14.80% | 14.61% | 44.11% | 20.82% | 6.07% |
| Bloomberg US Agg Bond | -0.39% | 0.22% | 0.18% | 5.00% | 3.51% | 0.20% |
| Bloomberg High Yield Corp. | 0.05% | 1.83% | 1.33% | 8.57% | 9.03% | 4.38% |
| Bloomberg Global Agg | 0.07% | 1.45% | 0.36% | 3.25% | 2.98% | -1.43% |
OBSERVATIONS
Major U.S. large-cap indices finished the week higher on the back of strong tech earnings and the continued Iran ceasefire.
The Nasdaq led the advance for the week (+1.12%), followed by the S&P 500 (+0.92%), and the Dow Jones (+0.55%).
Mid-cap stocks also finished the week in positive territory but trailed large caps, advancing +0.40%. Small-cap stocks were the second strongest performer and posted a gain of +0.94%.
Developed international markets posted higher returns for the week (+0.98%), while emerging markets posted weaker returns (-0.52%) as investors weighed the impact of energy supply disruptions on their economic growth.
Domestic and international fixed income indices were mixed on the week as interest rates rose. The U.S. Aggregate Bond Index dipped -0.39% as yields rose while high-yield corporate bonds were mostly unchanged (+0.05).
International bonds experienced slightly positive returns for the week and finished up +0.07%.
BY THE NUMBERS
Spirit Airlines Shuts Down After Government Bailout Plan Fails:
Spirit grounded what remained of its bright-yellow fleet at 3 a.m. on Saturday and closed its call centers, leaving travelers to search for flights on its competitors. After struggling financially for years and failing in its effort several years ago to merge with rival JetBlue, Spirit said the skyrocketing costs of jet fuel because of the war in Iran proved to be too much. Spirit’s roughly 17,000 employees and contractors, including more than 2,000 pilots and 5,500 flight attendants, were in line to lose their jobs. The Trump administration had been floating a $500 million rescue plan that would have given the government a hefty ownership stake in the budget airline. Though it was often skewered for its bare-bones service, Spirit’s corresponding dirt-cheap fares opened air travel to people who otherwise may not have been able to afford it.³
Trump says the U.S. Will Guide Stranded Ships from the Strait of Hormuz:
The United States will launch an effort on Monday to “guide” stranded ships from the Iran-gripped Strait of Hormuz, President Donald Trump said, as two ships around the strait reported attacks. “Project Freedom” would begin on Monday morning in the Middle East, Trump said, adding that his representatives are having discussions with Iran that could lead to something “very positive for all.” U.S. Central Command said the initiative would involve guided-missile destroyers, more than 100 aircraft and 15,000 service members. The Pentagon did not immediately answer questions about how they would be deployed.⁴
Disclosures
The statements provided herein are based solely on the opinions of the Osaic Research Team and are being provided for general information purposes only. Neither the information nor any opinion expressed constitutes an offer or a solicitation to buy or sell any securities or other financial instruments. Any opinions provided herein should not be relied upon for investment decisions and may differ from those of other departments or divisions of Osaic Wealth, Inc. (“Osaic”) or its affiliates.
Certain information may be based on information received from sources the Osaic Research Team considers reliable; however, the accuracy and completeness of such information cannot be guaranteed. Certain statements contained herein may constitute “projections,” “forecasts” and other “forward-looking statements” which do not reflect actual results and are based primarily upon applying retroactively a hypothetical set of assumptions to certain historical financial information. Any opinions, projections, forecasts and forward-looking statements presented herein reflect the judgment of the Osaic Research Team only as of the date of this document and are subject to change without notice. Osaic has no obligation to provide updates or changes to these opinions, projections, forecasts and forward-looking statements. Osaic is not soliciting or recommending any action based on any information in this document.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. In general, the bond market is volatile; bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer-term securities. Any fixed-income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Vehicles that invest in lower-rated debt securities (commonly referred to as junk bonds or high-yield bonds) involve additional risks because of the lower credit quality of the securities in the portfolio. International investing involves special risks not present with U.S. investments due to factors such as increased volatility, currency fluctuation, and differences in auditing and other financial standards. These risks can be accentuated in emerging markets.
Index performance does not reflect the deduction of any fees and expenses, and if deducted, performance would be reduced. Indexes are unmanaged and investors are not able to invest directly into any index. Past performance cannot guarantee future results.
Securities and investment advisory services are offered through the firms: Osaic Wealth, Inc. and Osaic Institutions, Inc., broker-dealers, registered investment advisers, and members of FINRA and SIPC. Securities are offered through Osaic Services, Inc. and Ladenburg Thalmann & Co., broker-dealers and members of FINRA and SIPC. Advisory services are offered through Ladenburg Thalmann Asset Management, Inc., Osaic Advisory Services, LLC. and CW Advisors, LLC., registered investment advisers. Advisory programs offered by Osaic Wealth, Inc. are sponsored by VISION2020 Wealth Management Corp., an affiliated registered investment adviser.
_____
1 Data obtained from Bloomberg as of 5/1/2026.
2 Data obtained from Morningstar as of 5/1/2026.
3 Spirit Airlines, low-cost innovator, shuts down after Trump bailout plan fails
4 Trump says US will start to 'guide' stranded ships out of Strait of Hormuz | AP News
8909448