The S&P 500 (Index: SPX) closed out the trading week ending on Friday, 8 May 2026 at its highest closing value ever: 7,398.93. The index itself was up 2.3% from the preceding trading week's close.
Much of the market's gain came as AI-technology companies reported very strong earnings, which is ultimately what powered the index higher during the week that was.
So much so that it largely erased what was left from the Iran war's negative impact. We can show that's the case in the following chart because the trajectory of the S&P 500 has returned to the middle of the redzone forecast range we added to the chart in late February 2026. Though we added it for other reasons, the centerline of the range has functioned well as a counterfactual projection of where the S&P 500 would have gone had the Iran war geopolitical event never occurred.
The market moving headlines of the week that was reveal just how much the strong earnings being reported in the AI-technology sector contributed to the S&P 500's gains during the week that was:
- Monday, 4 May 2026
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- Signs and portents for the U.S. economy:
- Oil jumps after Iran's navy said it halted a US warship
- Oil up 3% after Iran claims it attacked US warship; US denies report
- Iran attacks UAE; U.S. says it sank boats in Strait of Hormuz
- Oil eases on signs US is loosening Iranian closure of Strait of Hormuz
- OPEC+ agrees third oil output quota hike since Hormuz closure
- Fed minions claim they can't do their jobs because of Iran conflict, are told that U.S. interest rates are too high:
- Kashkari says Iran war limits Fed's ability to provide rate guidance
- Recent inflation data was 'bad news,' Fed's Goolsbee says
- Williams says Fed policy well positioned for economic risks, uncertainty
- Trump says interest rates are too high
- Eurozone minions look to get US trade deal after Trump tariff threat:
- Bigger trouble developing in the Eurozone:
- Euro zone firms see new inflation surge if war lasts months, ECB poll shows
- ECB policymaker says euro zone recession concerns 'real and justified'
- ECB minions thinking about ditching their perfect, well positioned monetary policy despite recession threat:
- ECB may need to hike rates in June, Nagel says
- ECB needs "critical mass of data" before hikes, Villeroy says
- ECB's Kazimir: June rate hike all but inevitable
- S&P 500 falls from record high on Middle East worries
- Tuesday, 5 May 2026
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- Signs and portents for the U.S. economy:
- US job openings, hires point to stable labor market
- US job openings drop in March; hires increase sharply
- Data suggests ‘hiring recession’ may be behind us — but the Iran war poses job market risks
- US service sector growth cools as order growth drops by most in 3 years
- Oil prices fall 4% as fragile US-Iran ceasefire holds, two ships pass through Strait of Hormuz
- US new home sales increase in February and March; median price drops
- S&P 500 and Nasdaq notch records as AI chip stocks surge
- Wednesday, 6 May 2026
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- Signs and portents for the U.S. economy:
- Fed minions say Iran war looks like an inflationary shock, worry about U.S. economy overheating, have no idea whether boosting productivity will curtail inflation or add to it:
- Fed's Goolsbee says Iran war impact looking more like an inflationary shock
- Fed's Musalem: Risks have shifted towards higher inflation
- NY Fed says April supply chain pressures highest since July 2022
- Fed's Goolsbee: AI success would be 'lovely,' but Fed would still need to watch for overheating
- Fed's Goolsbee says rising productivity could restrain inflation or boost it
- ECB minions thinking more about hiking Eurozone interest rates:
- S&P 500 and Nasdaq notch records; AMD results spark AI stock rally
- Thursday, 7 May 2026
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- Signs and portents for the U.S. economy:
- US labor market stable as layoffs remain low
- US trade court rules Trump tariffs illegal, but issues narrow block
- Fed minions, number one buyers of U.S. government debt, excited to say demand for U.S. government debt is high; worry about inflationary mindset but say U.S. interest rates will stay on hold:
- Fed's Williams says demand remains robust for US government debt
- Fed's Hammack voices concern about 'inflationary mindset' taking hold
- Fed's Hammack says rates likely on hold 'for quite some time' amid elevated inflation
- Bigger trouble, stimulus developing in China:
- China asks banks to pause new loans to US-sanctioned refiners, Bloomberg News reports
- China's exports likely picked up pace in April on Iran war stockpiling: Reuters poll
- China energy imports drop in April amid Iran war as fuel exports hit decade low
- BOJ minions busy with bigger bailout of Japan's currency, explore additional reason to justify plan to hike Japan's interest rates:
- Japan may have spent $32 billion in additional yen-buying intervention
- Japan to keep intervening to defend 160-per-dollar level, ex-BOJ official says
- Japan keeps US close as it signals unlimited yen defence
- BOJ debated need for rate hike if energy shock persists, minutes show
- ECB minions facing structural problems in Eurozone economy, getting excited to ditch perfect monetary policy to hike Eurozone interest rates:
- Euro zone's integration fails to reach stock markets, ECB says
- German banks have capital but find few good borrowers, Bundesbank says
- ECB's Schnabel bolsters rate hike bets, warns of 'quiet erosion' of central bank independence
- S&P 500 ends down as chip stocks give up gains
- Friday, 8 May 2026
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- Signs and portents for the U.S. economy:
- April jobs report shows continued strength
- US container imports fell 5.5% in April on trade and geopolitical risks, Descartes says
- Oil pares early gains a day after renewed US-Iran fighting
- Fed minions worry about policy drag from former chief minion lingering on, say job market is "holding in", whatever that means:
- Fed's Miran hopes Powell staying at Fed is transitional - Fox Business
- Fed's Goolsbee tells CNBC that job market is holding in
- Bigger trouble for world developing in China:
- BOJ minions getting the wage-price inflation they wanted to justify plan for interest rate hikes in Japan, worked over holiday to bail out Japan's currency:
- Japan real wages climb for third month in March, backing case for BOJ rate hike
- Japan intervened in forex market again during May holidays, source says
- Wall Street climbs after the latest jobs report and brushes off Middle East concerns
The CME Group's FedWatch Tool continued to anticipate no Federal Reserve rate cuts in 2026 with a small bias in favor of a quarter point rate cut in 2026-Q3, but also has a small bias for a quarter point rate hike in the first half of 2027.
The Atlanta Fed's GDPNow toolestimate of +3.7% real GDP growth for the U.S. economy in the current quarter of 2026-Q2 held steady.
Image Credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull who is happy to see a newspaper headline that says 'AI IS BACK, BABY!' and a bear who is worried by a smaller headline that says 'RALLY IS REALLY NARROW', and an even smaller headline that says 'IRAN WAR NOT DONE YET'".