Wall Street extended its winning streak to six consecutive weeks, inflation hit its highest reading since 2023, Kevin Warsh took the Fed chair, Trump flew to Beijing, and copper broke COMEX records on a sulphur crunch nobody saw coming - a week in which the market and the macro data were operating from entirely different sets of assumptions.
Let's dig in.
Monday
Markets open at record highs on payrolls beat
The S&P 500 and Nasdaq entered the week at fresh record highs, carried there on Friday by an April payrolls report that beat estimates comfortably - 115,000 jobs added against a consensus of 62,000 - and by a sixth consecutive week of gains that has become the longest winning streak for both benchmarks since 2024.
The Nasdaq surged 4.5% for that prior week and the S&P 500 added 2.3%, with the Dow lagging at 0.2% - a gap that neatly captures the bifurcation between AI-driven momentum and the broader industrial economy that underpins it.
With 89% of S&P 500 companies having reported first-quarter results, 84% delivered a positive earnings-per-share surprise and 80% beat on revenue, according to FactSet Earnings Insight - one of the strongest reporting seasons on record, and the fundamental floor beneath a market that is technically stretched by most conventional measures.
Payrolls: the headline flatters
The jobs number that drove Friday's rally deserved closer inspection on Monday morning, with the internals of the Bureau of Labor Statistics report telling a more complicated story than the headline suggested.
The labour force participation rate dropped to 61.8% - its lowest reading since October 2021 - while the household survey recorded a decline of 226,000 workers, and the broader U-6 measure, which captures discouraged workers and involuntary part-timers, rose to 8.2% from 8.0%.
Federal government payrolls fell by another 9,000 in April, bringing cumulative losses since the October 2024 peak to 348,000 - an 11.5% contraction reflecting the White House's ongoing workforce restructuring, though some agencies have begun rebuilding staffing in recent weeks.
The information services sector lost a further 13,000 jobs in the month and has now shed 342,000 positions since November 2022, a contraction that coincides with accelerating AI adoption and represents roughly 11% of the sector's prior workforce - a number that will keep growing.
Chicago Fed president Austan Goolsbee characterised conditions as having been "pretty much stable for a year, year and a half" during a CNBC interview, noting the labour market was stable without being good - a description that captured the tension between headline data that looks benign and underlying indicators that are quietly deteriorating.
Consumer sentiment hits another record low
The University of Michigan's consumer sentiment survey dropped 3.2% month-on-month to 48.2 in May, below the 49.7 consensus estimate and 7.7% lower than a year earlier, with survey director Joanne Hsu noting that roughly one-third of respondents spontaneously cited gasoline prices and around 30% cited tariffs as primary concerns.
A gallon of regular petrol averaged US$4.54 nationally - up nearly 40 cents from a month earlier and around $1.40 above the same period in 2025 - with Hsu adding that Middle East developments were unlikely to meaningfully lift sentiment until supply disruptions had been fully resolved and energy prices fell.
Year-ahead inflation expectations softened slightly from 4.7% to 4.5%, though they remain substantially above the 3.4% reading recorded in February before the conflict began.
Trade court rules against Section 122 tariffs
The U.S. Court of International Trade delivered another legal setback to the White House's tariff agenda on Monday, ruling 2-1 that Trump's use of Section 122 of the Trade Act of 1974 to impose temporary 10% global tariffs was unlawful - though the decision applied only to two private importers and Washington state rather than triggering a nationwide injunction.
The ruling followed the Supreme Court's earlier invalidation of Trump's broader 2025 tariffs under the International Emergency Economic Powers Act, with the administration now pursuing three Section 301 investigations with findings due in July as it searches for legally durable trade enforcement tools.
Former IMF First Deputy Managing Director Gita Gopinath told Reuters the balance-of-payments rationale underpinning the Section 122 case lacked credibility, noting the U.S. was not facing a balance-of-payments crisis by any conventional definition.
Super recovers April losses
Australian superannuation funds recovered most of March's sharp losses in April, with the median balanced accumulation option returning an estimated 2.6% after falling 3.2% the prior month, according to SuperRatings - lifting the financial-year-to-date return to 5.5%.
SuperRatings director Kirby Rappell noted that markets had responded strongly to ceasefire-related optimism, while cautioning that the situation remained fluid and the full inflationary impact on global supply chains was still unfolding.
The RBA's 25-basis-point rate rise on 5 May had underscored that inflationary pressures were not abating domestically, even as the April rebound offered temporary relief for fund members who had held nerve through the March sell-off.
Armani succession draws luxury giants
Giorgio Armani Group is weighing a three-way equal split of an initial 15% stake among LVMH, L'Oréal and EssilorLuxottica - the three buyers named in the late founder's will - as the Milan-based house prepares to formally launch a succession-driven ownership process, according to Italian daily La Repubblica.
Giorgio Armani died in September 2025 at age 91, leaving a blueprint instructing the company to find a strategic partner to purchase an initial 15% stake within 18 months, with the possibility of raising that holding to nearly 70% within five years - a timeline that has the formal process well underway before early 2027.
Forbes has previously valued the group at $5.6 billion across revenues of approximately €2.35 billion spanning ready-to-wear, haute couture, hotels, cosmetics and accessories - making the initial 15% placement worth roughly $840 million, with the structure reflecting a curated consortium entry rather than a competitive auction.
Tuesday
Iran ceasefire described as being on life support
The diplomatic temperature around the Strait of Hormuz deteriorated sharply on Tuesday, with Trump describing the Iran ceasefire as being on "life support" and oil prices rising as markets reassessed the durability of a pause in hostilities that had already shown signs of fraying.
The assessment came as fresh U.S. sanctions linked to Iranian activities were imposed and UK lawmakers laid out additional measures - a coordinated Western signalling effort that implied the ceasefire negotiations were not progressing as Washington had hoped.
Talks between Beijing and Washington confirmed for later in the week lent some stabilising tone to proceedings, with markets interpreting the diplomatic calendar as a reason to hold positions rather than rotate defensively.
Burry draws a dot-com parallel
Scion Asset Management founder Michael Burry published a Substack note recommending investors reduce exposure to technology stocks - particularly those going parabolic - comparing the current AI-driven momentum to the final stages of the dot-com bubble and writing that the market had "jumped the shark."
Burry stopped short of recommending active short positions, noting that put options were expensive and that direct shorting could inflict significant losses during extended momentum phases, advising instead that investors raise cash and wait for the valuation reset that, in his reading of history, eventually follows every parabolic move.
The Philadelphia Semiconductor Index has risen 107% over the past year - a trajectory Burry flagged as reminiscent of the parabolic moves that preceded the collapse of internet stocks in 2000, though the market's response to his note was to deliver two more days of record highs by the end of the week.
Global debt reaches US$353 trillion
The Institute of International Finance's quarterly Global Debt Monitor recorded total global debt at close to US$353 trillion at the end of March 2026 - a new record driven primarily by government borrowing and accompanied by evidence of investors actively diversifying away from U.S. Treasuries toward Japanese and European government bonds.
IIF global markets director Emre Tiftik warned the shift could push U.S. government debt onto an unsustainable path, with forward pressure factors including defence spending increases, cybersecurity and AI infrastructure outlays, and ageing population costs expected to continue driving both sovereign and corporate debt accumulation - compounded further by the Middle East conflict.
Wednesday
CPI hits 3.8% - highest since 2023
Consumer prices rose 3.8% annually in April - the highest reading since May 2023 and a sharp half-point acceleration from March's 3.3% - with the monthly CPI print coming in at 0.6% as Strait of Hormuz supply disruptions continued to transmit directly into energy and food costs.
Energy was the lead driver, surging 3.8% for the month and accounting for more than 40% of the headline gain, with gasoline prices up 28.4% annually, shelter costs rising 0.6%, and the tariff-sensitive apparel category adding 0.6% for the month.
Core CPI - which excludes food and energy and is the Fed's preferred gauge of underlying price pressure - held at 2.8% annually, unchanged from April 2025, prompting ANZ analysts to note that tariffs had not yet fanned a broader inflation problem despite the headline acceleration.
Real average hourly earnings fell 0.5% for the month and 0.3% year-on-year after accounting for inflation, meaning workers absorbed the energy shock in both their fuel bills and their pay packets simultaneously.
Following the print, markets lifted the probability of a Federal Reserve rate hike by December to 29.9%, according to the CME Group FedWatch Tool - a figure that would have been considered implausible when the year began.
Saudi Arabia's covert Iran strikes revealed
Reuters reported Wednesday that Saudi Arabia had conducted covert military strikes on Iranian territory in late March - the first known instance of Riyadh directly targeting Iran militarily - in retaliation for Iranian attacks on Saudi infrastructure during the ongoing regional conflict.
The previously unreported operations, confirmed by Western and Iranian officials, indicated that Gulf states had moved from reliance on U.S. military protection toward independent retaliatory action as Iranian missiles and drones penetrated regional defence systems across all six Gulf Cooperation Council states.
The UK simultaneously announced deployment of Typhoon fighter jets, HMS Dragon and autonomous mine-hunting equipment to a 40-nation multinational mission protecting Hormuz shipping lanes, backed by £115 million in new mine-hunting drone and counter-drone funding - a commitment that widened the conflict's coalition footprint considerably
US$56bn approach
eBay chairman Paul Pressler described GameStop's $56 billion takeover proposal as "neither credible nor attractive" in a formal rejection that cited uncertainty about bid financing, operational integration risks, governance concerns and the gap between the offer's implied valuation and eBay's standalone growth prospects.
Gordon Haskett analysts described the approach as a "lopsided marriage proposal" before eBay had formally responded, noting the odds of acceptance were low even before the board convened - a read that proved accurate given the speed of the rejection.
GameStop, best known for a 700% weekly share price surge driven by retail investors in 2021, has been sitting on a substantial cash reserve accumulated through equity issuances during that period, and is evidently looking to deploy it into an acquisition that would represent a significant strategic pivot from its core video games retail business.
Thursday
Warsh confirmed as Fed chair
The U.S. Senate confirmed Kevin Warsh as the next Federal Reserve chairman in a 54-45 party-line vote, ending Jerome Powell's tenure at the top of the world's most influential central bank and installing a 56-year-old former governor and investment banker who has previously criticised the Fed's inflation management.
Warsh denied at his confirmation hearing that he would act as Trump's "human sock puppet" on monetary policy and asserted he would be an independent actor - a pledge the incoming inflation data will test at his first Federal Open Market Committee meeting scheduled for 16-17 June.
Powell is expected to remain on the Board of Governors until 2028, creating the unusual dynamic of a former chair continuing to sit at the policy table alongside his successor - Powell having cited a series of legal attacks on the institution as his reason for staying on rather than departing on the day his chairmanship ended.
Trump lands in Beijing
Donald Trump touched down in Beijing on Thursday for his first China visit since 2017, accompanied by a delegation of 17 chief executives, including Tesla's Elon Musk, Nvidia's Jensen Huang, Apple's Tim Cook and Boeing chief Kelly Ortberg - the kind of corporate entourage that signals commercial intent before a word of diplomacy is spoken.
Xi Jinping opened proceedings by telling the assembled executives that China's door would open wider to U.S. companies and that American firms stood to enjoy broader commercial prospects - language Beijing's subsequent actions on chip licences, rare earth restrictions and the Boeing order will be measured against in the months ahead.
Copper breaks COMEX records on Gulf sulphur crunch
COMEX copper broke to a fresh all-time high of $6.58 per pound (lb) on Thursday as a Gulf sulphur crunch tightened its grip on Chilean smelter throughput, as detailed in the Azzet Commodities Wrap - pushing the metal through levels that had previously represented the ceiling of demand-driven price optimism.
Around one-third of global sulphur production originates in the Gulf, and with that supply line severed since March, the sulphuric acid used by Chilean heap-leach and anode refiners has turned critically short, forcing output cuts and tightening a concentrates market that was already running thin heading into the year.
China's subsequent suspension of its own sulphuric acid exports then layered a trade-policy complication onto what was already a geopolitical supply shock - pushing LME copper above $13,000 per tonne (t) and prompting Westpac economists to set a peak call of around $13,350/t in Q1 2027 once electrification demand adds further pressure to the supply-shock premium already priced into the market.
Wholesale inflation hits 6%
The U.S. producer price index (PPI) came in at 6% annually in April - the strongest reading since December 2022 and well above consensus - with the monthly PPI rising 1.4% against an expected 0.5%, as energy drove three-quarters of the goods component and services inflation posted its largest monthly gain since March 2022.
Gasoline prices surged 15.6% for the month, while freight transportation, professional services margins and apparel wholesaling all contributed to a broadening in price pressure that went considerably beyond what the energy shock alone could explain.
Markets moved after the release to price in just a 27.9% probability of a rate cut for the remainder of the year - a posture that creates an immediate tension with incoming Fed chair Warsh's publicly stated preference for lower rates.
Friday
Wall Street posts fresh records as Beijing delivers
All three major U.S. indexes advanced on Friday, with the S&P 500 and Nasdaq Composite posting fresh record closing highs at 7,501 and 26,635 respectively, driven by Nvidia surging 4.4% after the Commerce Department cleared H200 chip sales to Chinese firms, and Cisco jumping 13.4% on earnings and guidance that beat consensus - though the networking giant simultaneously announced plans to cut nearly 4,000 jobs, which is the sort of detail that does not slow a momentum tape.
Optimism around the Trump-Xi summit supported sentiment broadly, with both leaders reportedly agreeing the Strait of Hormuz must remain open - a statement that moved markets even in the absence of any operational mechanism to enforce it.
The Beijing summit delivers less than expected
Trump announced Beijing had agreed to purchase 200 Boeing jets - attributing the commitment to Xi and noting the planemaker had wanted 150 and got 200 - though the figure landed well below the roughly 500 aircraft sources had indicated were under discussion, and neither Boeing nor Chinese officials confirmed aircraft types, recipient airlines or delivery schedules following the announcement.
Boeing shares fell close to 4% as investors weighed the gap between pre-summit expectations and the number Trump put on the table - a reaction that captured the tension between diplomatic optics and commercially actionable outcomes, a distinction the market generally resolves in favour of the latter.
The U.S. Commerce Department issued purchasing licences permitting roughly 10 Chinese technology companies - including Alibaba, Tencent, ByteDance and JD.com - to acquire Nvidia's H200 processors at a cap of 75,000 units each, though Reuters reported no hardware had reached any approved Chinese buyer as of the summit date, with sources indicating Beijing remained dissatisfied with the conditions attached to the approvals.
On Taiwan, a Xinhua readout from the closed-door session reported Xi told Trump the island was "the most important issue in China-U.S. relations" and warned that mishandling the matter would produce "clashes and even conflicts" - language that left little ambiguity about where Beijing's redline sits regardless of whatever commercial goodwill the summit generated.
On rare earths - where China controls roughly 90% of global processing capacity for materials critical to semiconductors, electric vehicles and defence hardware - CBS News reported Beijing agreed to halt export restrictions as part of the broader trade easing preceding the visit, a concession the Council on Foreign Relations assessed had been extracted from a position of materially greater leverage than China held during Trump's 2017 visit.
Cerebras IPO: the AI mania in one listing
Cerebras Systems surged 68% on its Nasdaq debut, opening at $350 from a $185 IPO price before closing at $311 - capitalising the AI chipmaker at $95 billion and raising $5.55 billion in the largest public listing of 2026.
The IPO was oversubscribed by more than 20 times, prompting the company to lift both the size and price range of the offering during the week, with investor demand reflecting the same positioning dynamic that has driven the Philadelphia Semiconductor Index up 107% over the past year - precisely the trajectory Michael Burry had flagged three days earlier as a dot-com parallel.
The company had originally filed to go public in September 2024 but withdrew after disclosures showed 85% of revenue came from a single UAE customer - G42 - a concentration that had fallen to 24% by the time of the April refiling, which is a meaningful improvement in business quality even if the IPO valuation left little room for further deterioration.
Honda posts its first loss in 70 years
Honda recorded an annual operating loss for the first time in its nearly 70-year listed history, absorbing $10 billion in EV-related charges for the fiscal year ended March 2026 and producing an operating loss of 414.3 billion yen - the worst financial result since the automaker listed in 1957.
Chief executive Toshihiro Mibe scrapped the company's goal of EVs accounting for a fifth of new-car sales by 2030, abandoned its 2040 full-EV transition target, and suspended indefinitely the $11 billion Canada EV and battery manufacturing programme that had been Honda's largest ever single investment commitment.
Honda's shares recovered 3.8% on the news after the company pledged at least 800 billion yen in shareholder returns over three years and indicated the underlying business remained profitable excluding EV-related charges - a qualifier that did considerable heavy lifting given the scale of the writedown that had just erased seven decades of unbroken profitability.
The result is not a cautionary tale about EVs failing - it is a cautionary tale about overcommitting capital to an adoption curve that moved slower than the modelling suggested, in a tariff and demand environment that became materially more hostile after the investment decisions were already locked in.
A ship seized near the UAE coast
A vessel was reportedly seized near the UAE coast on Friday, adding a fresh incident to a Hormuz security picture that had been briefly calmed by the Beijing summit's joint statement on keeping the strait open - a reminder that operational reality in the Gulf does not wait for diplomatic communiqués to be processed by energy markets.
What to watch next week
- Warsh's first public remarks - Any signal from the incoming Fed chair on the June FOMC meeting's direction will be scrutinised closely, given markets are now pricing in the possibility of a hike rather than the cuts Warsh previously favoured.
- Beijing follow-through - Whether China confirms the Boeing order with aircraft types and delivery schedules, and whether H200 licence approvals translate into actual hardware shipments, will determine how much of the summit's market optimism is durable.
- Hormuz and the ceasefire - The diplomatic channel between Washington and Tehran remains the single variable with the greatest capacity to move oil, LNG, copper and headline CPI in either direction within a short timeframe, as Friday's ship seizure illustrated.
- Copper supply chain - Any further curtailments from Chilean smelters or additional restrictions on sulphuric acid flows will extend a record-breaking move that commodity desks are still calibrating against their Q2 and Q3 call structures.
- Retail sales and consumer spending - While April retail sales came in at 0.5% for the month, partly inflated by fuel costs; the underlying consumer picture matters considerably more than the headline print, given sentiment readings at record lows and real wages in negative territory.
