Jobs Beat, Six-Week Streak, and the End of the Powell Era

U.S. equity markets posted their sixth consecutive weekly gain: the longest winning streak for the S&P 500 and Nasdaq since 2024. The S&P 500 surged +2.34% for the week to close at a new all-time high of 7,398.93. The Nasdaq Composite climbed +4.51% to a fresh record of 26,247.08, propelled by an AI-infrastructure-driven tech rally. The Russell 2000 added +1.72% to 2,861.21, just shy of its own all-time high. The Dow Jones lagged at +0.22%. The NYSE Composite was the lone decliner, slipping -0.43% as energy and traditional value sectors retreated.

The week's catalyst arrived Friday morning with a blowout April jobs report. Nonfarm payrolls grew +115,000 versus the +62K Wall Street consensus, nearly DOUBLE expectations. Healthcare and transportation/warehousing led the gains, marking the first back-to-back six-figure jobs reports since late 2024. The unemployment rate held steady at 4.3%. Wage growth was a tame +0.2% month-over-month: tame enough to keep inflation hawks at bay, robust enough to support the consumer. The 10-year Treasury yield rose +11 bps to 4.38% on the news as traders trimmed rate-cut expectations: markets now price roughly a 40% chance of a Fed rate HIKE by April 2027, up from 25% a week earlier.

Iran Tensions Resurface, But Stocks Shrug

Mid-week brought renewed Strait of Hormuz tensions: three U.S. Navy destroyers reportedly intercepted Iranian missile and drone attacks on Wednesday, prompting U.S. defensive strikes on Iranian launch sites. President Trump dismissed the incidents as "unimportant" and confirmed the ceasefire remains in effect. Markets briefly pulled back Thursday but recovered fully on Friday. Washington still awaits Iran's formal response (expected via Pakistan within days) to the latest U.S. proposal for a permanent reopening of the Strait. Oil prices ended the week LOWER at $94.68/bbl, down 7.3%, on the assumption that diplomacy is still on track.

AI Trade Powers Tech, Burry Sounds Alarm

The Nasdaq's 4.5% weekly surge was driven almost entirely by AI-infrastructure plays. The S&P 500 technology sector gained +3.27% on Friday alone. Caterpillar (CAT) and Alphabet (GOOGL) were among 16 S&P 500 stocks hitting all-time highs Thursday. Notably, "Big Short" investor Michael Burry warned in a public note that "stocks are not up or down because of jobs or consumer sentiment: they are going straight up because they have been going straight up," comparing the move to "the last months of the 1999-2000 bubble." Markets, characteristically, did not appear to be listening.

April CPI Tuesday, Powell's Final Day, and the Warsh Confirmation

After six straight weeks of gains, all eyes turn to Tuesday's April CPI report: the most consequential data print in weeks. Headline CPI is forecast at +3.7% YoY (up from 3.3% in March), with energy prices keeping inflation elevated. Core CPI is expected at +2.7% YoY. Anything materially above forecast risks reigniting rate-hike chatter and could end the six-week win streak. Meanwhile, Friday May 15 marks the official end of Jerome Powell's term as Fed Chair, and the full Senate is expected to vote on Kevin Warsh's confirmation this week to ensure a clean transition.

Tue May 12: April CPI & Warsh Vote Window

The April CPI release at 8:30 AM ET will dominate the week. Energy prices remained elevated through April with WTI averaging above $95/bbl, so a hot headline is widely expected. The market reaction will hinge on the core reading: a clean +0.3% MoM/+2.7% YoY would be welcomed; an upside surprise would rattle equities. The full Senate vote on Warsh is also likely Tuesday or Wednesday.

Wed May 13: April PPI

Producer price data will provide the second inflation read of the week and the first look at pipeline pressures from the energy spike feeding into corporate margins. Cisco reports earnings after the close.

Thu May 14: Retail Sales & Walmart

April retail sales at 8:30 AM ET will reveal whether American consumers kept spending despite higher gas prices. Walmart reports earnings before the open: its consumer health commentary is the most-watched real-time signal of household behavior in the inflation environment.

Fri May 15: Powell's Last Day, Michigan Sentiment

Powell's term as Fed Chair officially ends. He has confirmed he will stay on as a Governor through January 2028. Preliminary May Michigan Consumer Sentiment also releases. With the April final reading at a record-low 49.8, any improvement would be a positive signal for the Fed's policy outlook.

With WTI at $94.68 and the 10-year at 4.38%, markets remain caught between strong earnings/jobs and lingering inflation/geopolitical risks. The S&P 500 at 7,398.93 defends a fresh ATH. A cool CPI print combined with a Hormuz peace deal could push the index toward 7,500. A hot CPI plus any breakdown in talks risks the first material correction since the war began.