Closing Recap 

U.S. stocks continued their remarkable rally, with the S&P 500 and Dow Jones Industrials logging their ninth consecutive day of gains, fully erasing the steep losses from April’s tariff turmoil, boosted Friday by a strong jobs report and signs of potential trade negotiation progress. 

Index	Last Closing Level	Friday’s Change	Friday’s Change (%)
DJ Industrials	41317	564.47	0.0139
S&P 500	5686	82.54	0.0147
Nasdaq	17977	266.99	0.0151
Russell 2000	2021	44.87	0.0227

Looking Ahead

Looking ahead, the focus shifts squarely to central bank decisions and key global data releases. The Federal Reserve’s policy meeting concludes on Wednesday. With no rate change anticipated and no new economic projections scheduled, all attention will fall on the language in the policy statement and Chair Powell’s subsequent press conference. Investors will parse Powell’s comments for any shift in tone regarding the economic outlook, the impact of tariffs, and the potential path for interest rates, especially given the market’s current pricing of significant rate cuts later this year (~90bps). The Fed is likely to maintain a cautious, data-dependent stance, potentially sounding less dovish than current market expectations. 

On Thursday, the Bank of England takes center stage. A 25bps rate cut is widely expected given recent PMI weakness and official concerns about tariff impacts. However, with inflation remaining sticky and recent growth/retail sales data holding up reasonably well, the BoE’s accompanying guidance and updated economic projections may not endorse the market’s very dovish pricing for further cuts throughout the year. A less dovish outcome than priced in could support the Pound. Elsewhere, China’s April trade data on Friday will be a critical litmus test for the real-world impact of escalating US tariffs on global commerce. Key activity indicators like the US ISM Non-Manufacturing PMI (Monday), along with Japanese wage data (Friday) and the Canadian jobs report (Friday), will provide further pieces to the global economic puzzle.

Key Takeaways 

• Impressive Rally Continues: S&P 500 & Dow posted 9 straight days of gains, recouping April “Liberation Day” tariff sell-off losses. Nasdaq and Russell 2000 also gained strongly Friday. 
• Strong Jobs Report: April Nonfarm Payrolls beat expectations (+177k vs +130k est.), though prior months were revised lower. Private sector jobs also topped forecasts. 
• Trade Talk Hopes: Investor risk appetite revived on signs China may be open to tariff negotiations, helping offset negative guidance from Apple (AAPL) citing tariff costs. 
• Trump Renews Fed Pressure: Despite the strong jobs data, President Trump again called for Fed rate cuts, though the Fed is expected to maintain its cautious stance amid tariff uncertainty. 
• Dollar Slide Pauses: The US Dollar Index (DXY) recovered some ground during the week as trade rhetoric softened slightly but still ended the week marginally lower near the 100 level. 
• Oil Plummets: Crude oil prices fell sharply over the week (WTI -7%), continuing April’s steep decline, despite a small Friday move. 
• Gold Rebounds Friday, Down Weekly: Gold saw a partial rebound Friday but finished the week lower, well off recent record highs. 
• Looking Ahead: Focus shifts to key central bank decisions (Fed, BoE) and important economic data releases in the upcoming week.

Market Overview 

The U.S. stock market staged a remarkable comeback, extending its winning streak significantly through the week. The S&P 500 and Dow Jones Industrials impressively marked their ninth consecutive day of gains on Friday, a run that fully recouped the sharp losses incurred during the April “Liberation Day” tariff sell-off which had briefly pushed major indices into bear market territory. Investor sentiment improved markedly, fueled by Friday’s stronger-than-expected April Nonfarm Payrolls report (+177k jobs added vs. 130k estimate, though prior months saw downward revisions) and emerging signs that China might be open to negotiating on trade tariffs. This positive momentum overshadowed concerning guidance from index heavyweight Apple (AAPL), which warned of significant tariff-related costs. 

Despite the robust jobs data suggesting economic resilience, President Trump renewed his public calls for the Federal Reserve to lower interest rates. However, the Fed is widely expected to remain on the sidelines at its upcoming meeting, reiterating the need for more clarity on the economic impact of the administration’s tariffs before adjusting policy. The US dollar saw a pause in its recent sharp decline, recovering some ground intra-week as trade rhetoric cooled somewhat, but it still finished the week slightly lower. In contrast, crude oil continued its precipitous fall, shedding another 7% on the week.

Economic Data Calendar (Week of May 5th) 

MON (May 6): 

• US ISM Non-Manufacturing PMI (Apr): Key gauge of the US service sector activity, watched for impact post-tariff announcements. 

WED (May 8): 

• FOMC Rate Decision & Press Conference: No rate change expected. Focus entirely on the statement’s tone and Chair Powell’s assessment of tariff impacts, inflation risks, and conditions for future policy moves vs. market rate cut pricing.
• NZ Employment Report (Q1): Labor market data for New Zealand. 

THU (May 9): 

• Bank of England (BoE) Rate Decision, Minutes & Monetary Policy Report: 25bps rate cut widely expected. Focus on updated economic projections (inflation/growth), policy guidance, and vote split vs. market expectations for ~3 more cuts this year. 
• US Weekly Initial Jobless Claims: Labor market indicator. 

FRI (May 10): 

• China Trade Balance (Apr): Crucial data point showing export/import performance amid heightened US tariffs. Potential market mover. 
• Japan Overall Wage Income (Mar): Watched for signs of wage pressure supporting potential future BoJ tightening. 
• Canada Labour Force Survey (Apr): Key jobs report; strong data could reduce odds of near-term BoC rate cut. 

Commodities, Currencies, and Treasuries 

Gold prices saw a modest rebound on Friday but ultimately finished the week lower, retreating further from the record highs seen recently as some safe-haven demand eased slightly with hopes for trade talks. Crude oil prices extended their sharp decline, with WTI falling over 7% during the week to settle near $58/bbl, weighed down by persistent demand concerns exacerbated by the trade war backdrop. The US Dollar Index (DXY) stabilized somewhat after weeks of sharp losses, recovering from intra-week lows near 99.40 to finish around the 100 mark, aided perhaps by the strong jobs report. The Euro faded from its highs to finish little changed against the dollar near 1.13. The 10-Year Treasury yield ended the week higher around 4.316%, rising notably on Friday following the jobs data.

Asset	Last Level	Friday’s Change	Unit / % Change
WTI Crude	58.29	-0.95	USD/bbl
Brent Crude	61.29	-0.84	USD/bbl
Gold (June Fut.)	3243.3	21.1	USD/oz
EUR/USD	1.1293	0.0002	Rate
USD/JPY	145.04	-0.37	Rate
10-Year Note Yield	0.04316	0.00085	Yield (%)