Markets Climb the Wall Again

Big Tech delivers—but oil, the Fed, and OpenAI complicate the narrative

Author

George Babis
May 03, 2026

👋 ICYMI

This was the biggest earnings week of the year — and one of the most eventful weeks for markets in recent memory. Five of the seven "Magnificent Seven" companies reported quarterly results, the Federal Reserve held its most divided meeting in 34 years, the UAE announced it would leave OPEC+, oil surged back above $107, and a Wall Street Journal report revealed that OpenAI has missed its own revenue targets.

The S&P 500 ended the week at 7,166 and the Nasdaq at 25,114, both near record highs, as Apple's $AAPL ( ▲ 3.24% )  blowout quarter on Thursday lifted sentiment into the close. For the week, the Nasdaq rose roughly 1% while the Dow slipped 0.3% — dragged lower by IBM's $IBM ( ▲ 0.53% ) 7% drop and Honeywell's $HON ( ▼ 0.85% ) 5.6% decline after weak guidance.

On Wednesday evening, the Fed held rates at 3.50–3.75% in an 8–4 vote — the most dissents since October 1992. Three dissenters wanted to remove the easing bias from the statement, while Governor Miran dissented in favour of an immediate cut — for the sixth consecutive meeting. In what was likely his final press conference as Chair, Jerome Powell said he will remain on the Board of Governors until the investigation into the Fed's headquarters renovation is "well and truly over". Kevin Warsh, Trump's nominee to succeed Powell, advanced out of the Senate Banking Committee the same morning.

Oil dominated headlines again. Brent crude surged to $119 and WTI topped $107 on Wednesday after the Wall Street Journal reported that Trump has told aides to prepare for an extended blockade of Iran and rejected Tehran's proposal to reopen the Strait. Gas hit $4.22 nationally. And on Tuesday, the UAE announced it would leave OPEC+ effective May 1 — a potentially seismic shift in the oil cartel's ability to manage supply.

🔁 Market Movers

👀 Signals I'm Watching

  • 📊 The Capex Arms Race Just Escalated Again

    All four hyperscalers that reported this week raised their 2026 capex guidance. Alphabet raised to $180–$190 billion. Microsoft guided Q4 capex above $40 billion, with $190 billion total for the year. Combined Mag 7 AI capex is now projected above $600 billion for 2026. The market is rewarding companies that can show returns on that spending (Alphabet's Cloud +63%) and punishing those that can't yet (Meta's flat Q2 guide). The bar for the next round of reports just got higher.

  • 🏛 The Warsh Era Begins — With Powell Still in the Room

    Kevin Warsh advancing out of committee the same morning Powell held his last press conference was symbolic. The incoming Chair inherits a deeply divided FOMC and an economy caught between sticky inflation and a war-driven oil shock. Powell staying on the Board as a governor creates an unusual dynamic — the most experienced policymaker in the room will no longer be leading the discussion. Markets will be watching Warsh's first public comments closely for signals on his policy philosophy.

  • 🍎 Apple Is Playing a Different Game

    While every other Mag 7 company is spending tens of billions on AI infrastructure, Apple is delivering record revenue growth with minimal capex — just $4.3 billion in the first half of fiscal 2026, down from $6 billion a year ago. Apple is partnering with Google on foundation models for Siri rather than building its own hyperscale data centres. If it can deliver competitive AI experiences without the spending, its free cash flow advantage widens further. The $100 billion buyback is a statement of confidence in that approach.

  • 🛢 Oil and the "War Rearview Mirror" Theory Is Being Tested

    Just last week, an investor called the war "in the rearview mirror for the market." Then Brent surged to $119 on Wednesday. The market keeps trying to move past the conflict, and the conflict keeps pulling it back. The indefinite ceasefire hasn't resolved the fundamental issue — the Strait of Hormuz remains contested, the U.S. blockade is hardening, and now the UAE's exit from OPEC+ adds another layer of uncertainty to global supply dynamics.

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— George

⚠️ Red Flag to Note

The OpenAI Report Is a Warning Shot for the AI Trade

OpenAI missing its own revenue targets is significant — not because one company's growth matters that much in isolation, but because OpenAI is the most visible AI company on earth and the reference point for $600 billion in hyperscaler capex commitments. If the poster child of the AI revolution can't grow fast enough to pay its compute bills, it raises a legitimate question: are the hyperscalers building capacity for demand that hasn't yet materialized? The market shrugged it off by Friday, but the WSJ report is worth revisiting if AI application-layer names continue to underperform hardware. ServiceNow's $NOW ( ▲ 3.23% ) 18% drop last week and now this OpenAI data point are forming a pattern that investors should not ignore.

🔍 Insider Transactions I’m Watching

Ticker

Insider

Action

Value

Why It Matters

$GOOG ( ▲ 0.34% )  

Sundar Pichai — CEO

Sell

~$28M (week of April 21)

Pichai sold shares under a pre-arranged 10b5-1 plan ahead of the Q1 report that sent the stock up 10%. Pre-planned or not, a $28M exit by the CEO of the week's biggest earnings winner is notable context for investors weighing whether to add at these levels.

$LW ( ▲ 0.71% )  

Jana Partners — Activist Investor

Buy

~$22M (April cumulative)

Jana continued to accumulate Lamb Weston shares throughout April, purchasing an additional 150,000 shares at $42–$43 this past week alone. Their total stake now exceeds 5.4 million shares, and they have a board seat. Persistent activist buying after a 30%+ decline in a food company caught between rising input costs and restructuring is a contrarian bet worth monitoring.

$THM ( 0.0% )  

Paulson & Co. — 10%+ Owner

Buy

~$12.6M

John Paulson's fund purchased 4.9 million shares of International Tower Hill Mines on April 16, building a cumulative $77.7M stake of 34.2 million shares in the gold mining company. With gold volatile and energy costs elevated, Paulson's concentrated accumulation in a single Alaskan gold deposit is one of the most conviction-heavy bets in the commodity space.

📬 Closing Note

This was a week that reminded investors why they pay attention to earnings season.

Five of the most important companies in the world reported in the span of 48 hours. The Fed held its most divided meeting in 34 years. Oil surged back above $107. The UAE left OPEC+. And OpenAI — the company at the centre of the AI narrative — reportedly can't grow fast enough to cover its compute costs.

Yet through all of that, the S&P 500 and Nasdaq finished near record highs. Apple's $111 billion quarter and $100 billion buyback carried the market through the noise. Alphabet showed that cloud growth can still accelerate. And corporate earnings overall are tracking 14.5% growth — well above what most analysts expected at the start of the year.

Contradiction is the natural state of markets. The investors who do well don't resolve every contradiction — they identify which ones matter most and position accordingly.

Stay patient. Stay selective.

Until next Sunday,