The S&P 500 surged 0.81% to a record 7,259.22 on Tuesday, May 5, after US Defense Secretary Pete Hegseth confirmed the US-Iran ceasefire “certainly holds,” sending WTI crude down 3.9% to $102.27 and Brent down 4.0% to $109.87. The Reserve Bank of Australia hiked 25 basis points to 4.35%, the first G10 rate increase since the war began on February 28, citing inflation expectations at 5.9%.
JOLTS data showed hiring surging 655,000 to a 3.5% rate, ISM Services prices paid came in at 70.7 (below 73.7 consensus), and new home sales beat at 682,000. Below: the RBA’s logic, BCB Copom minutes, the ISM breakdown, and what to watch this week.
The Big Three
• S&P 500 closes at record 7,259.22 (+0.81%) as Hegseth’s ceasefire confirmation sends oil down 4% and the Nasdaq hits 25,326 on its 10th record close in May.
• RBA hikes to 4.35%, first G10 increase since the war, after Melbourne Institute inflation expectations surged to 5.9% and Q1 CPI showed persistent price pressure.
• JOLTS hiring rate jumps to 3.5% from 3.1%, the largest monthly hiring increase in over a year, while ISM Services prices paid at 70.7 undercut the 73.7 consensus for the first below-expectations services-price reading since February.
Economic Dashboard
| INDICATOR | LATEST | PREV | Δ DAY | Δ YTD |
|---|---|---|---|---|
| S&P 500 | 7,259.22 | 7,200.75 | +0.81% | +18.4% |
| Nasdaq Composite | 25,326.13 | 25,067.80 | +1.03% | +21.8% |
| Dow Jones | 49,298.25 | 48,941.90 | +0.73% | +8.2% |
| WTI Crude | $102.27 | $106.42 | -3.9% | +42.1% |
| Brent Crude | $109.87 | $114.44 | -4.0% | +38.7% |
| US 10-Year Yield | 4.38% | 4.44% | -6 bps | +28 bps |
| Selic (Brazil) | 14.50% | 14.75% | -25 bps | -25 bps |
| RBA Cash Rate | 4.35% | 4.10% | +25 bps | +25 bps |
| Fed Funds Rate | 3.75% | 3.75% | Unch | Unch |
| Atlanta Fed GDPNow (Q2) | 3.7% | 3.5% | +0.2pp | n/a |
As of close, May 5, 2026. Sources: CNBC Markets, Trading Economics, Federal Reserve, RBA.
Hegseth confirms ceasefire holds, oil drops 4%, S&P hits record 7,259
Defense Secretary Pete Hegseth told reporters that the US-Iran ceasefire “certainly holds” and that “two US Navy carrier groups remain on station” despite Monday’s missile exchange between Iran and the UAE, according to CNBC. WTI fell 3.9% to $102.27 and Brent dropped 4.0% to $109.87, reversing Monday’s entire surge. The S&P 500 rose 0.81% to 7,259.22, the Nasdaq gained 1.03% to 25,326.13, and the Dow added 356 points to 49,298.25.
The session reinforced the inverse correlation between oil and equities that has defined this war: every session where crude has declined has produced equity gains over the past six weeks. Pinterest surged 15% on Q1 revenue guidance above the $1.11 billion consensus, while Palantir fell 3% despite beating earnings (33 cents vs. 28 cents expected), according to CNBC. The API reported a massive 8.1 million barrel crude draw (consensus was 2.8 million), suggesting physical supply is tighter than the geopolitical de-escalation implies.
RBA hikes 25 bps to 4.35%, first G10 increase since the war began
The Reserve Bank of Australia raised its cash rate to 4.35% from 4.10%, according to the RBA’s monetary policy statement. Consensus from 28 of 32 economists surveyed by Bloomberg expected a hold. Governor Michele Bullock cited Melbourne Institute inflation expectations at 5.9% (up from 5.2% in March) and persistent commodity-price pass-through as the primary justifications. The hike makes the RBA the first G10 central bank to raise rates since February 28.
The decision contrasts sharply with the BCB’s surprise cut to 14.50% on April 29: the BCB looked at domestic weakness and cut despite $100+ oil, while the RBA looked at expectations de-anchoring and hiked despite cooling PMIs (manufacturing 51.3, services 50.7). Australian PMIs finalized slightly above flash readings, both in expansion, giving the RBA evidence the economy can absorb the tightening. The AUD strengthened 0.6% against the USD. The global monetary policy spectrum now runs from the RBA (hiking) through the Fed, ECB, BoE, and BoJ (holding) to the BCB (cutting).
JOLTS hiring surges 655,000 to 3.5% rate, ISM Services prices undershoot at 70.7
Total JOLTS job openings slipped to 6.87 million in March, down 56,000 from February and slightly above the 6.8 million Dow Jones consensus, according to BLS data. The hiring rate surged 0.4 percentage points to 3.5%, with total hires jumping 655,000 to 5.55 million, the largest monthly hiring increase in over a year. Quits rose 125,000 to 3.17 million. Layoffs rose 153,000 to 1.87 million.
ISM Non-Manufacturing came in at 53.6 in April (consensus 53.7), according to the Institute for Supply Management. Business activity rose to 55.9 from 53.9, employment improved to 48.0 from 45.2. Prices paid held at 70.7 versus the 73.7 consensus, the first below-expectations services-price reading since the war. New orders softened to 53.5 from 60.6 (consensus 57.3). The combination of surging hiring and moderating services prices gives the Fed breathing room: the labor market sustains growth while the inflation pipeline shows first signs of easing.
New home sales beat at 682,000 as trade deficit narrows to $60.3 billion
New home sales rose 7.4% to 682,000 in March (consensus 652,000), the strongest reading since the war started, according to the Census Bureau. Building permits for March dropped 11.4% to 1.363 million (consensus 1.372 million), signaling builders are working through existing authorizations while refusing to commit new projects at 6.35%+ mortgage rates.
The US goods trade deficit narrowed to $60.3 billion in March (consensus $61.0 billion, according to the Bureau of Economic Analysis). Exports rose to $320.9 billion from $314.7 billion. Canada’s trade balance flipped to a C$1.78 billion surplus (consensus C$2.40 billion deficit), driven by energy exports, according to Statistics Canada. The Atlanta Fed GDPNow for Q2 rose to 3.7%, nearly double Q1’s 2.0% final reading.
Spain unemployment drops 62,700 as ECB officials deliver coordinated remarks
Spanish unemployment fell 62,700 in April, more than three times the 18,600 decline consensus expected, according to Spain’s labor ministry. Combined with Q1 GDP at 0.6%, retail sales at 4.1%, and manufacturing PMI at 51.7, Spain remains the eurozone’s strongest major economy. UK car registrations surged 24.0% YoY, reflecting front-loaded demand ahead of expected fuel-price increases.
ECB President Lagarde, Vice President De Guindos, and Chief Economist Lane all spoke Tuesday, likely framing the June 5 decision. Spanish 12-month Letras cleared at 2.635% (prior 2.611%), suggesting the ECB hold at 2.15% is fully priced. Canada’s services PMI improved to 49.2 from 47.2 but remained in contraction. As analyzed in the May 1 global economy briefing, the eurozone entered Q2 at 0.1% GDP with 3.0% CPI.
BCB Copom minutes detail surprise-cut rationale as IPC-Fipe decelerates to 0.40%
The BCB released minutes from the April 28-29 Copom meeting that produced the surprise 25 bps cut to 14.50%, published on the BCB’s website. The committee prioritized domestic activity weakness (services at 0.5% YoY, retail at 0.2% YoY) over the external oil shock, and cited the IPCA-15 undershoot at 4.37% (vs. 4.48% consensus) as inflation cover. Brazil’s IPC-Fipe gauge decelerated to 0.40% MoM from 0.59%, the second consecutive decline.
Colombia exports surged 20.9% YoY in March (prior 11.4%), the strongest growth in months, driven by elevated crude and coal prices, according to DANE. Brazil’s manufacturing PMI crossed into expansion at 52.6 (from 49.0), according to S&P Global. Oil at $102 is the BCB’s vindication zone: high enough for Petrobras revenues, low enough to keep inflation manageable. As tracked in the April 30 briefing, the BCB saw something the consensus did not.
What to Watch This Week
Wednesday, May 6 · EIA Weekly Crude Inventories (API showed 8.1M draw; consensus -2.8M)
Wednesday, May 6 · Disney, Uber, Arm Holdings report earnings
Thursday, May 7 · McDonald’s, Shell, Airbnb, Coinbase report (Shell guidance on Brent assumptions is key)
Thursday, May 7 · US Initial Jobless Claims (prior 189K was a cycle low)
Friday, May 8 · US Nonfarm Payrolls, April (consensus ~185K; JOLTS hiring at 3.5% suggests upside)
Friday, May 8 · Canada Employment (BoC on hold at 2.25%)
Frequently Asked Questions
Why did the RBA hike rates on May 5, 2026?
The Reserve Bank of Australia raised its cash rate 25 basis points to 4.35% on May 5, 2026, citing de-anchoring inflation expectations. The Melbourne Institute survey showed consumer inflation expectations at 5.9%, up from 5.2% in March. Governor Bullock pointed to persistent commodity-price pass-through from the US-Iran war as the key risk. The RBA is the first G10 central bank to hike since the war began on February 28.
What did the JOLTS report show for March 2026?
The Bureau of Labor Statistics reported 6.87 million job openings in March, slightly above the 6.8 million consensus. The hiring rate surged to 3.5% from 3.1%, with total hires jumping 655,000 to 5.55 million. Quits rose to 3.17 million. Combined with initial claims at 189,000 (a cycle low), the US labor market is at its tightest point since the war began.
Why is the S&P 500 at a record despite the Iran war?
The S&P 500 closed at 7,259.22, its highest level ever, driven by an 88% Q1 earnings beat rate, five consecutive manufacturing survey beats (Empire State, Philly Fed, KC Fed, Richmond, ISM), and a ceasefire that markets treat as the base case. The index gained over 10% in April, its best month since November 2020. Oil’s 4% decline on the session was the immediate catalyst.
What did the BCB Copom minutes reveal about the April rate cut?
The BCB released Copom minutes on May 5, 2026, detailing its decision to cut the Selic 25 basis points to 14.50% on April 29. The committee prioritized domestic demand weakness over the external oil shock, citing services growth at 0.5% YoY and retail at 0.2% YoY. The IPCA-15 undershoot at 4.37% versus 4.48% consensus provided inflation cover. Brazil’s IPC-Fipe then decelerated to 0.40%, supporting the decision.
When is the next US nonfarm payrolls report?
The April nonfarm payrolls report is scheduled for Friday, May 8, 2026, at 8:30 AM ET. Consensus expects approximately 185,000 jobs added. The JOLTS hiring rate surge to 3.5% suggests upside risk. Average hourly earnings growth is the key inflation variable for incoming Fed Chair Kevin Warsh, who takes office around May 15.
Updated: 2026-05-06T08:00:00Z by Matt Camenzind
Previously: Global Economy Briefing — May 5, 2026 · Global Economy Briefing — May 1, 2026 · Global Economy Briefing — April 30, 2026 · Sources: Trading Economics · CNBC Markets · Bureau of Labor Statistics · The Rio Times