Following a week where U.S. stocks climbed 1%, the market is showing a significant shift in internal dynamics. While the previous narrative was heavily concentrated in semiconductors, we are now seeing a broader “dispersion” across various industries.

The Asset Landscape: WTI Leads, Crypto Lags

Commodities and global indices showed mixed results this week, but energy remains the standout performer for 2026:

• WTI Crude surged +8.0% this week, extending its massive +77.5% YTD gain.
• Crypto: Bitcoin (BTC) remained flat (+0.1%), while Ethereum (ETH) dropped -1.8%.
• JPY strengthened by 1.5% vs USD after Friday’s 35$ bn intervention.

Sector Performance: Energy is King

The divergence between sectors continues to widen, particularly when looking at year-to-date (YTD) figures:

• Energy remains the undisputed leader, up a staggering 32.9% YTD.
• Technology performed in line with the S&P 500 this week, both gaining roughly 0.9%.
• Materials took a hit, falling -1.1% on the week despite a +13.7% YTD performance.

  

   

Macro & Rates: Yields Creep Higher

Inflation expectations are firming up, supported by recent ISM Manufacturing Prices data.

• Bond Yields: The U.S. 10y rose to 4.37% (up 7 bps on the week), while the U.K. 10y hit 4.96%.
• Fed Expectations: The market expects rates to remain flat for the remainder of the year, with no significant changes priced into the Fed Funds Rate (FFR) through late 2026.
• Volatility: The VIX sits at 16.99%, returning to levels last seen in February as volatility compresses at the index level but not on the single names level.

Earnings Season: A Historic “Beat” Rate

The Q1 2026 earnings season has been exceptionally strong, with 314 S&P 500 companies already reporting (Source: LSEG):

• Earnings Beats: 83.1% of companies reported earnings above analyst expectations.
• Surprise Factor: In aggregate, earnings are 11.5% above estimates, significantly higher than the long-term average surprise of 4.4%.
• Revenue: 78.4% of companies have beaten revenue estimates, coming in 2.0% above aggregate expectations.

Source: Goldman Sachs.

The Week Ahead: High-Stakes Catalysts

As we move into the week of May 4th, 2026, the focus shifts to labour data and a heavy retail/tech earnings slate:

• Macro Catalysts: Key data points include ISM Services (Tuesday), ADP Employment (Wednesday), and the highly anticipated Non-Farm Payrolls (NFP) on Friday.
• Earnings Watch: Heavyweights like Disney, Shopify, AMD, Uber, and Arm are set to report.
• Market Concentration: Watch for volatility in Utilities, as 46% of the sector’s market cap reports this week.

  

   

   

While the S&P 500 continues its upward trajectory with a “big monthly candle” thanks to a very strong earnings season, geopolitics might come back and offer some consolidation at these levels. Investors should keep a close eye on whether the current “dispersion” continues to favour hedge fund favourites or if the market narrows back into a “Semis only” trade.

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