Calmer Waters: Stocks Rebound as Ceasefire Holds
Published as of: May 5, 2026, 9:14 a.m. ET
(Tuesday market open) Stocks crept tentatively higher on news reports that a ship successfully made it through the Strait of Hormuz under U.S. protection. The tenuous ceasefire remains in place, Trump administration officials reiterated today, despite yesterday's provocations. This removed some pressure as oil fell, giving investors a chance to focus on earnings from key tech firms including Palantir (PLTR) last night and Advanced Micro Devices (AMD) later.
Focus also turns to jobs, starting with the March Job Openings and Labor Turnover Survey (JOLTS) due at 10 a.m. ET. Analysts expect around 6.8 million openings, slightly down from February. One number to watch is the quits rate, or the number of people who left their positions, which has held near 2% or below since last summer and can be a barometer of tighter job market. "Any additional declines would suggest more weakness under the surface than what the headline unemployment rate suggests," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research, or SCFR.
Major indexes stumbled Monday, burdened by rising Middle East tensions and related jumps in yields and crude, though tech fared better in general. Almost every S&P 500 sector slipped, the second straight poor outing and a reminder that the market's recent success could depend partly on the ceasefire holding. Still, those familiar with the old phrase, "sell in May and go away," might want to consider that the S&P 500 Index rose in 12 of the last 13 Mays. Past isn't precedent, naturally.
Three things to watch
- Earnings line up, with AMD looming: Today's a busy earnings day highlighted by Shopify (SHOP), Pfizer (PFE), and Anheuser-Busch InBev (BUD) this morning. Arguably the key event comes after the close when Advanced Micro Devices (AMD)—a leading AI chip firm—reports. The consensus earnings per share estimate is $1.29. Last time out, AMD beat analysts' earnings and revenue consensus but appeared to disappoint investors with what some felt was conservative guidance, sending shares to initial sharp losses. The company said then it expected $9.8 billion in first quarter revenue, a number to keep in mind later today. Another item to watch is any updates on the company's new integrated server-scale AI system Helios, which AMD said in February is on schedule to begin ramping in the second half. Walt Disney (DIS) reports early tomorrow, providing insight into consumer demand when travelers appear to be pulling back due to high oil prices and the war. Norwegian Cruise Line (NCLH) said yesterday it's seen bookings lag, especially to Europe. Disney also has a cruise line.
- Yield check: The 10-year Treasury note yield hit one-month highs yesterday near 4.45% as rising oil prices continue to drive yields higher, especially on the shorter end of the curve. The long end is elevated, too, with the 30-year yield hitting 5% yesterday for the first time since mid-2025, not a positive sign for mortgage borrowers. A move above 4.5% would likely capture investors' attention, and not in a good way. Climbing yields can put pressure on stocks and increasingly reflect lower odds of any Federal Reserve rate cuts in the current inflationary climate. "There's still hope out there that the Fed has impetus to cut, but the only reason the Fed would cut would be a significant deterioration in the labor market," said Liz Ann Sonders, chief investment strategist at SCFR, in a CNBC appearance this morning. The only reason the Fed would hike, she added, would be a significant acceleration in the inflation rate. "Most likely they stay on hold for the bulk of the year," Sonders said.
- Watching jobs data with AI in mind: With multiple batches of jobs data out this week, one thing analysts will be looking for is signs that AI is driving layoffs or a lack of hiring. So far, AI's impact on jobs has been limited mostly to the tech sector, according to Goldman Sachs researchers. In an earnings call last week, Amazon (AMZN) CEO Andy Jassy said much of tech work is being transformed, noting that at his company five people recently took about two months to complete a software project that normally would have taken "40 or 50 people a year." Even so, the extent to which AI is directly driving layoffs is unclear, even in the tech sector, where some companies have been accused of "AI washing" job cuts that are more likely the result of overstaffing or other causes. In other cases, layoffs could be simply a reallocation of resources to AI infrastructure spending. In an earnings call last week, Meta (META) CFO Susan Li said a 10% cut to the workforce announced in April would help "offset the substantial investments we're making." In any case, AI will remain a major theme in the job market in 2026.
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On the move
- Palantir slipped 3% early today even though earnings topped analysts' estimates. Revenue rose nearly 85% from a year ago, and the company raised guidance for the full year to levels that surpassed FactSet consensus. Palantir shares have long traded at a high price-to-earnings, or P/E ratio, which could help explain failure to find traction from strong earnings.
- Pfizer ticked up 2% in early trading even though profit fell from a year ago amid higher research and development spending, according to The Wall Street Journal. Investors appeared to forgive a 12% rise in R&D spending for cancer and obesity products. Quarterly revenue beat expectations.
- Circle Internet Group (CRCL), which rose almost 20% yesterday, added 3% this morning, while Coinbase Global (COIN) climbed 4%. This came as bitcoin futures (/BTC) topped $80,000 early this week for the first time since late January and is up 19% over the last month. It also occurred as media reports cited progress on the CLARITY ACT, a congressional bill that would create a regulatory framework for crypto. However, $80,000 could represent tough technical resistance, Bloomberg reported.
- Pinterest (PINS) soared 17% in early action as earnings and guidance topped consensus for the social media firm. Pinterest reported an all-time high of 631 million global monthly active users, up 11% year over year.
- Shopify (SHOP) plunged 5% following its earnings report after operating profit missed consensus even though revenue climbed 34% from a year earlier. Shopify shares have tumbled this year, hurt by worries of AI competition.
- Anheuser-Busch InBev spiked 6% following its first sales volume growth in three years in what The Wall Street Journal called a "rebound" in the beer industry. Results beat analysts' estimates as beer volume rose 1.2%, helped by sales in Latin America.
- PayPal (PYPL) fell 9% in early trading despite earnings and revenue that beat expectations. Guidance for the second quarter came in below expectations, but the company reiterated full-year guidance.
- Advanced Micro Devices rebounded 2% this morning after a 5% decline yesterday ahead of today's earnings. HSBC downgraded shares yesterday, saying it sees limited upside to AMD's first quarter estimates, saying 2026 server upside will be capped by foundry capacity constraints. If that's the case, AMD might have trouble meeting strong demand for central processing units, or CPUs.
- Tech stocks are generally up this morning, led by the chip space with gains for Micron (MU), Intel (INTC), and ASML (ASML). Chips have led rallies lately, but market breadth hasn't expanded much, leading to fears that Wall Street is overly dependent on one sector.
- The Schwab Trading Activity Index™ (STAX) fell to 50.10 in April, down from 56.04 in March and the second monthly decline in a row. In April, Schwab clients tracked by STAX made a meaningful rotation out of higher-beta individual holdings and into broad-based lower-beta exchange-traded funds, or ETFs, which not only led to a drop in the score but appears to indicate a meaningful dip in sentiment.
More insights from Schwab
Sentiment declined in April: Schwab's STAX report showed older and younger generations of Schwab clients taking a more conservative investing approach as high oil prices, inflation, and Middle East tensions weighed on sentiment. However, there's also evidence of "de-risking" without abandoning equities, through rotation out of "risk-on" sectors.
Chart of the day
Data sources: Cboe, Nasdaq. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
Bank stocks, represented in this year-to-date-chart of the Nasdaq Bank index (BANK—candlestick) have leveled off over the last month despite strong earnings from many of the biggest U.S. financial institutions. The index is up about 5% so far this year, roughly even with the S&P 500 Index (SPX), but slightly below a 6% gain so far for the 10-year Treasury note yield (TNX:CGI—purple line). Higher long-term yields can give banks a tailwind, but the 2/10 spread measuring the slope of the yield curve has also fallen sharply since earlier this year as rate cut hopes slid, putting pressure on banks from a margin perspective.
The week ahead
Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.
May 6: ADP April employment and expected earnings from Walt Disney (DIS), Uber Technologies (UBER), Novo Nordisk (NVO), CVS Health (CVS), Marriott International (MAR), Apollo Global Management (APO), Medline (MDLN), Arm Holdings (ARM), AppLovin (APP), DoorDash (DASH), and Warner Bros. Discovery (WBD).
May 7: February construction spending and expected earnings from Shell (SHEL), McDonald's (MCD), Gilead Sciences (GILD), McKesson (MCK), CoreWeave (CRWV), Coinbase Global (COIN), and Airbnb (ABNB).
May 8: April nonfarm payrolls, preliminary May University of Michigan Consumer Sentiment, and expected earnings from Sony (SONY) and Enbridge (ENB).
May 11: April existing home sales and expected earnings from Constellation Energy (CEG) and Circle Internet Group (CRCL).
May 12: April CPI and core CPI, and expected earnings from JD.Com (JD).
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