By Sarah Chen · Senior Markets Correspondent · Mon, May 4, 2026 · 7:05 AM EST
The S&P 500 closed April at a record 7,209, capping its strongest month in nearly six years, even as Brent crude held above $111 a barrel on persistent tensions around the Strait of Hormuz.
Wall Street enters May with two narratives running side by side. Equity benchmarks are still printing record highs, lifted by a Q1 earnings season that has surprised sharply to the upside. At the same time, the Iran war is keeping crude prices stubbornly elevated and reigniting the inflation conversation that markets had largely written off in late 2025.
April’s monthly gain was the index’s best since the post-pandemic rebound of 2020, with the rally led by Communication Services and Consumer Discretionary names. Alphabet, Amazon and Meta together drove most of the upward earnings revisions, and the blended Q1 earnings growth rate for the S&P 500 now sits above 27 percent — the highest reading in nearly four years.
S&P 500 Record Tested by Energy Variables.
Brent has traded above $111 for most of the past month after briefly spiking past $126 on disruption fears. The latest ISM Manufacturing survey held at 52.7 in April, but the prices-paid sub-index pushed to its highest level since April 2022 as oil and diesel costs filtered through to factory inputs. Forty-seven percent of survey respondents flagged the war directly in their commentary, and more than two-thirds of the open responses were negative.
For the rate path, that matters. Markets had been pricing two cuts before year-end. Energy-led inflation pressure complicates that math, even if the Fed keeps signalling patience.
| “Sentiment among ISM panelists remained mixed in the second month of the Iran War.”— ISM Manufacturing Business Survey Committee, April 2026 |
The Buffett-less Berkshire moment
The massive $397.4 billion cash reserve held by Berkshire Hathaway has become a pivotal psychological anchor for institutional investors, signaling a deep-seated caution that contrasts sharply with the S&P 500’s record climb to 7,209
As Warren Buffett characterizes the current investing climate as more akin to “gambling” than value-based strategy his decision to sit on nearly $400 billion in dry powder suggests that market multiples, currently at a forward P/E of 20.9 may be reaching unsustainable levels. This “Buffett-less” moment for Berkshire , marked by its first meeting without Buffett as CEO , highlights a widening disconnect where record Q1 earnings growth of 27 percent is being overshadowed by war-driven energy inflation a severe UK terror threat , and a Federal Reserve path that remains increasingly murky
Consequently, fewer institutional buyers are willing to “reach” for new positions , as the risk of an energy-led correction looms and the market’s primary safety margin—Buffett’s endorsement of current valuations—appears to have been withdrawn
What to watch this week
Friday’s US non-farm payrolls report is the calendar event. JOLTS and ADP land mid-week, and ISM Services prints Tuesday. Earnings include Palantir, AMD, McDonald’s, HSBC, Shell and Novo Nordisk — a slate broad enough to test whether the Q1 surprise extends past Big Tech. Forward 12-month P/E on the S&P 500 has now pushed to 20.9, well above the 10-year average of 18.9, which leaves limited room for any disappointment to be absorbed quietly.
Tags: Markets & Economy, S&P 500, Oil Prices, Iran War, Federal Reserve
Promotion — LinkedIn
| LinkedIn Post Records on one side. $111 oil on the other. The S&P 500 just closed April at 7,209 — its best month since 2020 — even as Iran-war pressure keeps crude elevated and the Fed’s path looks murkier than markets are pricing. Friday’s US jobs print could decide which narrative wins May. The full breakdown is on TSD →#Markets #SP500 #OilPrices #FederalReserve #TheSuccessDigest |
