The University of Michigan’s Consumer Sentiment Index dropped to a record low of 48.2 in early May 2026, missing market expectations of 49.5 and falling below April’s 49.8. The current conditions component declined about 9% to 47.8, driven by growing concerns over high prices affecting personal finances and buying conditions for major purchases. Meanwhile, the expectations index edged up to 48.5, though real income expectations continued their decline from March. About one-third of consumers spontaneously cited gasoline prices, and roughly 30% mentioned tariffs, underscoring that consumers still feel pressured by rising costs, particularly at the pump. Year-ahead inflation expectations eased slightly to 4.5% from 4.7%, while long-run inflation expectations dipped to 3.4% from 3.5%.

WTI crude oil futures were little changed at $95 per barrel on Friday as renewed clashes between the US and Iran raised doubts about the durability of a fragile ceasefire and tempered hopes for a quick peace agreement, though prices still posted a weekly loss of about 7%. Fighting in the Persian Gulf kept markets focused on the Strait of Hormuz, which has remained largely closed since late February, disrupting global crude flows and creating a major supply shock. Iran accused the US of violating the ceasefire, while Washington said American forces struck Iranian military targets after attacks on US warships and blocked tankers attempting to leave Iranian ports. President Donald Trump said the ceasefire remained in effect despite the exchanges. Traders continue balancing expectations for diplomacy against the risk of further escalation.

The S&P 500 rose 0.8% to close at 7,399 on Friday, while the Nasdaq Composite gained 1.7% to 26,247, with both indexes hitting fresh highs. The Dow Jones Industrial Average edged up 12 points to 49,609. Sentiment was supported by stronger-than-expected US labor data, as nonfarm payrolls increased by 115,000 in April, beating forecasts, while the unemployment rate held at 4.3%. Investors also monitored renewed clashes between the US and Iran in the Strait of Hormuz, though President Donald Trump said the ceasefire remained intact. Markets continued to await Tehran’s response to a US proposal aimed at ending the conflict. Meanwhile, optimism around AI spending boosted technology shares, with Micron Technology and Sandisk surging sharply. All three major indexes ended the week higher, supported by strong corporate earnings and continued strength in tech stocks. The Nasdaq rose 4.5% and the S&P 500 added 2.3%, marking a sixth straight winning week and the longest winning streak since 2024.

The US economy added 115K jobs in April 2026, following an upwardly revised 185K increase in March, and way above market forecasts of 62K. Job gains occurred in health care (37K), transportation and warehousing (30K), and retail trade (22K). Federal government employment continued to decline (-9K) and decreases were also seen for information (-13K) and manufacturing (-2K). While the figure points to a moderation in hiring, it also marks the first back-to-back monthly increase in employment in nearly a year, reinforcing signs that the US labor market is gradually cooling while remaining broadly resilient. The change in total nonfarm payroll employment for February was revised down by 23K to -156K and the change for March was revised up by 7K to 185K. With these revisions, employment in February and March combined is 16K lower than previously reported.

Geopolitical tension in the Middle East will remain the focus for global markets as the US-Iran ceasefire was repeatedly threatened last week. Among economic data releases, the spotlight will be on the US consumer and producer inflation rates amid a divided Fed, in addition to retail sales and industrial production. In Europe, the UK will post its GDP, trade balance, and join the Eurozone in publishing industrial production, while Germany will publish the ZEW sentiment report. China will release key monetary aggregates and join the US in posting its CPI and PPI. Elsewhere, the Bank of Japan will unveil details on policymakers' takes and leading indicators are should be the focus in Australia. Earnings will be important in Asia and Europe, featuring results from Tencent, Alibaba, Siemens, Allianz, Siemens Energy, Mitsubishi Financial, Mizuho, and the Commonwealth Bank.

The unemployment rate in Canada rose to 6.9% in April of 2026 from 6.7% in the previous month, overshooting expectations that it would remain unchanged at 6.7% to mark the highest jobless rate in six months. The number of unemployed people rose by 51.2 thousand from the previous month, or 3.4%, to 1.566 million. The increase was partially explained by a 33.5 thousand increase in the labor force as more Canadians entered the job market to look for employment, lifting the labor force participation rate by 0.1 percentage points to 65%. In turn, the proportion of the unemployed population that has been looking for work for six months or more was little changed at 22.5%, remaining above the long-term average of 17.1%. The monthly layoff rate was at 0.6%, in line with the pre-pandemic average. Meanwhile, net employment unexpectedly fell by 17.7 thousand, missing expectations of a 15 thousand gain.