US equities extended their rally to a sixth consecutive week, with the S&P 500 gaining 2.3% to a record high of 7,398 and the Nasdaq surging 4.5% to close above 26,000 for the first time, driven by AI and technology stocks. The Dow lagged with a modest 0.2% gain due to its lower tech exposure, while the Russell 2000 advanced 1.7%, reflecting improved domestic growth optimism. The 10-year Treasury yield held around 4.35% as markets continued to price in a "higher for longer" Fed policy, while credit spreads tightened 2–5bps on the back of strong corporate earnings.
The Q1 2026 earnings season remained the primary tailwind, with over 80% of companies beating estimates and earnings growth around 25% across the S&P 500. The broadening of AI's impact across sectors beyond tech is reinforcing the durability of the current growth cycle. On the geopolitical front, the week began with heightened tensions in the Iran conflict, but a US peace proposal eased concerns and fueled a strong Friday rally. April payroll data showed 115,000 new jobs — above expectations — reinforcing labor market resilience and boosting economic growth optimism.
Markets are now monitoring the US-Iran peace proposal developments, while the conflict will be on Trump’s agenda when he meets Chinese President Xi Jinping later this week. Meanwhile, key focus for the coming week will be April CPI inflation data, alongside earnings from retail and AI infrastructure names.
