Asset Management
05/04/2026 Market Strategy
May 04, 2026
Keep on Growing
Many US Indexes Closed at New Highs as Earnings Season Brings Strong Results
Key Takeaways
- Stocks rallied last week on strong earnings reports, and as investors showed patience with the situation in the Middle East.
- Several indexes closed at new all -time highs last week, including the S&P 500, the S&P 600 (small caps), the Russell 2000 (small caps), and the Nasdaq Composite.
- The Q1 earnings season rolled on with many firms reporting strong results and positive guidance. With 63% of firms having reported, earnings are up 28% from a year earlier on revenue growth of 1 1%.
- Nine of the 11 sectors are seeing positive earnings growth, with eight at double -digit rates. Just two sectors (energy and health care) are showing declines.
- This week 126 companies are slated to report; just ten are due over the week of May 11 as the season begins to wind down.
- This week also brings insights on the economy’s recent performance with the April non-farm payroll survey as well as the ISM survey of services firms due.
Equity market resilience this year supported by corporate fundamentals, economic data, monetary policy and substantive innovation helped push the S&P 500, the NASDAQ Composite, the S&P 600 (small caps) , and the Russell 2000 to their latest record highs last Friday. The direction the market will take this week has plenty of earnings results and key economic datapoints to be considered.
Stock prices in the US continue to reflect an appreciation for the fundamentals that matter most for revenue and profit growth.
What’s Ahead?
With a quarter of the S&P 500 companies scheduled to report Q1 results this week along with a raft of key US economic data that includes the non -farm payroll number and unemployment number at the end of the week investors will have plenty to ponder along with any developments in the negotiations process between the US and Iran.
Notwithstanding the recent powerful rallies in stocks, challenges remain to finding resolution for the conflict and in our view persist as a potential negative overhang to market performance with news flow from the Middle East, the price of oil, and supply chain disruptions adding to inflation risks near term.
That said, stock prices in the US continue to reflect in our view an appreciation for the fundamentals that matter most for revenue and profit growth
Where Are We Now?
With the calendar moving into the tenth week of conflict in Iran, it is our view that market participants have learned a number of key things from the current situation in the Middle East including:
- Oil remains a key lubricant of global trade and economic growth and is likely to remain so for some time into the future as:
- Alternative energy still lacks scale and efficiencies on the timeline leading to a point where alternative energy becomes the ubiquitous driver of world growth.
- Nations dependent upon imports of oil to maintain their economic trajectory will remain vulnerable to disruptions in the flow of oil and its by -products.
- In the US markets, the ability for growth to overtake value investing remains contingent on the potential for innovation to drive revenue and earnings growth as well as relative valuations stateside and globally.
- The dollar continues to remain the safe haven currency of the world whenever a period of elevated geopolitical risk emerges on the global landscape. US markets as a result are once again capturing the attention of foreign investors.
- Sector as well as individual stock selection remains at the forefront for performance with diversification an important factor in a marketplace quick to discount developments day to day and even hour to hour in the trading day.
- Along with diversification across sectors attention paid to market capitalizations and style can serve to help avoid over -concentration as tech (semiconductors, hardware and software) meet the challenges brought about by changes tied to developments in AI.
- Our favorite sectors remain: information technology, communications services, industrials, financials , and consumer discretionary.
- We continue to favor GARP (growth at a reasonable price) style stocks, and “growthier” value and cyclicals over defensives.
In our view it remains important for investors to avoid letting the noise and drama of day-to-day market activity obfuscate the intermediate and longer -term signal that can help stocks climb the proverbial “wall of worry.”
The courage of one’s convictions along with right -sized expectations as to how portfolio holdings will respond in times of market fluctuation based on a mix of technical, fundamentals , and projection are important to avoid having the noise of the day-to-day action in the market obfuscate the signal that drives the mid-to longer-term results.
Name:
John Stoltzfus
Title:Chief Investment Strategist, Oppenheimer Asset Management Inc.
John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business, and other notable networks.
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