To The Moon

Last week, the pendulum oscillating between Jobs and Inflation reports have swung back to Jobs.

Did the reports manage to exert any influence on US market sentiments, let’s find out.

Jobs & other US reports out this week include:

• Tue, 05 May 2026 - US Trade balance for March 2026.

• Tue, 05 May 2026 - S&P final US services PMI for April 2026.

• Tue, 05 May 2026 - Jobs opening & Labour turnover surveys (JOLTs) for March 2026.

• Tue, 05 May 2026 - ISM services for April 2026.

• Wed, 06 May 2026 - ADP Non-farm payroll report for April 2026.

• Thu, 07 May 2026 - Jobless claims - weekly & continuing.

• Fri, 08 May 2026 - US Consumer sentiments (Prelim) for May 2026.

• Fri, 08 May 2026 - US Non-farm payroll for April 2026..

US Trade Balance.

The US trade balance report for March 2026, showed trade deficit widening to -$60.3 billion from February 2026 downwards revised -$57.8 billion.

This is an increase of about +4.4% MoM and came in slightly ‘better’ than Wall Street -$60.9 billion expectation.

The data reflect a robust US economy that remains imbalanced:

• Imports rose +2.3% to $381.2 billion, fueled by strong domestic demand for vehicles, capital goods, and AI-related hardware, showing that businesses and consumers are still spending.

• Exports grew +2% to a record $320.9 billion, led by petroleum & agricultural products. Energy exports grew by +$2.8 billion, benefitting from higher oil prices linked to ongoing Middle East conflict.

Overall, the report paints a picture of a resilient but complex economic momentum with trade continues to subtract from GDP growth (about -1.3% in Q1 2026, according to Yahoo Finance).

S&P Final US Services PMI.

The S&P Final US Services PMI report for April 2026, signaled a return to growth for services sector following a contraction in March 2026.

The final headline index rose to 51.0, coming in marginally lower than consensus estimates of 51.3 and up from March 2026’s 3-year low of 49.8.

Although the shift from 49.8 to 51.0 marked a return to expansionary territory, it must be highlighted that new business intakes fell for the first time in 2 years.

This indicates that the underlying demand remains under significant pressure.

Lastly, while any reading above 50 indicates expansion, the "miss" suggested recovery was more tepid than initially thought.

Overall, conservatively, it can be viewed as a “mixed-to-weak” report.

Jobs Opening and Labour Turnover Surveys (JOLTs).

US job openings for March 2026 were 6.866 million, slightly below the revised February 2026 numbers of 6.922 million but above market forecast of 6.84 million.

While the overall trend in openings has been downward (4 of the last 5 months), March’s specific print provided a modest "beat" that signaled more resilience than bears anticipated.

While jobs openings dipped, the hiring rate had a massive monthly jump of 655,000 to 5.554 million or +3.5% MoM, indicating a stabilizing labour market. This was the highest hiring level since early 2024, more than offset February 2026's slump.

Layoffs climbed to 1.9 million, with most of the increase concentrated in Professional and Business Services. The hires bounce is sitting on a softening trend.

Quits ticked up to 2.0% (or 3.2 million) from 1.9%, but down YoY from 2.2%.

Workers are slightly more willing to job-switch MoM, but the yearly trend on worker confidence is still down. Wage pressure from the quits channel keeps fading.

ISM Services PMI.

The April 2026 ISM Services PMI report indicates that US services sector continues to expand, though growth slowed slightly, with index falling to 53.6% from March 2026’s 54%.

Still it indicates expansion (any numbers above 50) and is above the 12-month average of 52.5%.

While 14 industries reported growth, the sector faces pressures from (a) rising costs and (b) a shrinking labour force, signaling potential stagflation risks.

The consolidation is while headline cooled, the Business Activity sub-index rose +2.0 points to 55.9, proving that companies are still moving a high volume of work.

(1) The internal metrics of the report reveal a "tug-of-war" within the US economy:

• The Prices Index held steady at a very high 70.7.

• Its a level not seen since late 2022.

• Analysts noted that all services industries (18 in total) reported higher input costs, largely driven by the energy shock from the US-Iran conflict and tariff-related price hikes for materials like aluminum and lumber.

(Isn’t it clear now why Trump is so eager to secure a peace treaty with Iran and have the Straits opened and return to normalcy as soon as possible)

(2) At the same time, new orders fell by a massive -7.1 point to 53.5.

• Experts suggest this wasn't necessarily a collapse in demand, but rather a "normalization" after March 2026's spike, where businesses rushed to place orders to get ahead of anticipated price increases.

(3) The Employment sub-index rose to 48.0 from March's 45.2:

• It remained in contraction (index below 50) for the 2nd straight month.

• This suggests service providers are becoming more cautious about adding headcount as costs rise.

Overall, the ISM services report basically confirmed that US economy is "bending but not breaking”, yet providing a relatively stable background for investors to focus on the explosive growth in the AI and tech sectors.

ADP Non-farm payroll.

The ADP Non-farm payroll showcased a “spike” acceleration in private-sector hiring, marking the strongest monthly gain in over a year. (see above)

Private employers added 109,000 jobs, slightly below market consensus of 118,000 and much ‘better’ than March 2026’s 61,000.

This "positive” surprise signaled that US labour market remains more resilient than recession-wary analysts had modeled.

Hiring has been uneven across sectors: (see below)

• The 2 growth sectors were (i) Education & health services and (ii) Trade, transportation and utilities.

• The worst sector by contraction is Professional & business services.

Jobless Claims.

The latest jobless claims reports painted the picture of a US labour market that is gradually loosening but remains historically tight.

Weekly claims.

For week ending 02 May 2026, weekly jobless claims rose by +10,000 to 200,000 vs analysts’ estimates of 205,000 vs last week’s upwards revised 190,000. (see below)

Compared with last month’s jump to 214,000 (reported on 23 Apr 2026) and 30 Apr 2026’s reported dip to 189,000, this week looks like a mild rebound rather than a trend break.

It suggests layoffs stayed muted and the labour market remained resilient.

Continuing claims.

For week ending 25 Apr 2026, continuing claims fell by -10,000 to 1.766 million, down from previous week’s 1.776 million and slightly below the 1.8 million expected. (see above)

This implies fewer people stay on benefits and more importantly, a labour market that is still absorbing workers.

Incidentally, latest reading is also the lowest level of long-term unemployment claims seen since January 2024.

US Consumer sentiments (Prelim)

American consumers are feeling a level of economic anxiety not seen in over 70 years.

Latest US Consumer Sentiment Index (preliminary) for May 2026 by the University of Michigan Surveys of Consumers, fell by -1.6 to 48.2, falling very short of market consensus of 49.7 and April 2026’s 49.8. (see above)

Latest reading marked a new all-time low for the index, that has been tracking since 1952, dipping below previous month's record low.

Yes, the reading is even lower than the troughs seen during (a) the COVID-19 pandemic, and (b) the post-pandemic inflation surge of 2022.

Based on findings, decline was heavily driven by soaring gasoline prices, that rose over +50% since the start of the conflict in Iran at end February 2026.

Approximately ⅓ of consumers cited gas prices as the main cause of concern and another about 30% of respondents cited the impact of tariffs on their personal finances.

US Non-farm Payroll.

According to US Bureau of Labor Statistics (BLS) - US economy added 115,000 non-farm payroll (NFP) jobs in April 2026.

Confusingly, this comes in higher than Wall Street consensus of 65,000 but worse off than March 2026’s upwards revised 185,000.

With the 3-month average at approx. 100,000 it suggests a slow-growth phase rather than a recession. In short, it is a “hiring recession” turning corner, not booming but not breaking

Job Gains by Sector: Healthcare (+37,000), Transportation and Warehousing (+30,000), and Retail Trade (+22,000).

The readings are largely consistent with ADP NFP report, published 2 days earlier. (see above)

The only relief is Unemployment held steady at 4.3%, aligned with analysts’ consensus and last month’s readings, while average hourly earnings rose 0.2% monthly, and wage growth stayed at 3.6% yearly, that is cooling but above inflation.

Effects on US Market - S&P 500.

Going through all the US reports out last week vs the $S&P 500(.SPX)$ performance, I think it is only the April NFP report that clearly moved market sentiment in a positive way.

The 115K job beat drove Friday's rally, with S&P futures jumping +0.62% pre-market before closing at records.

This eased hard-landing fears in a stagflation context and reinforced the soft-landing narrative.

What about the other reports ? I think they served as supportive backdrop to broader risk-on drivers like AI momentum, oil declines, and Iran de-escalation.

This Week ?

With the US jobs report out on Friday, the pendulum once again swing back to inflation.

The inflation and other reports out this week will prove if the dragged out conflict in the Middle East will impact US economy overall :

• Tue, 12 May 2026 - Consumer Price Index (CPI) for April 2026.

• Wed, 13 May 2026 - Producer Price Index (PPI) for April 2026.

• Thu, 14 May 2026 - US Retail Sales for April 2026.

• Thu, 14 May 2026 - US Jobless Claims - weekly & continuing.

• Thu, 14 May 2026 - US Import Price Index for April 2026.

Historically, both CPI and PPI reports are among the most significant drivers of US market sentiment, often triggering major one-day movements in stocks, bonds, and US dollar.

These reports directly influence US’s Fed’s interest rate policy, with unexpected inflation figures causing rapid market re-pricing, sector rotation, and increased volatility.

With that, Tuesday will be a contentious day for US market.

This is because the Fed Reserves Bank of Cleveland’s NowCasting has forecasted a rise in annual inflation for both CPI & Core CPI, a marginal dip for monthly CPI and status quo for monthly Core CPI.

Should actuals match estimates, how will US market react ? With the Middle East peace talk still at an impasse, it is anyone’s guess how things will turn out.

As long as tension does not turn for the worse, a weak & fragile truce is better than none, right ?

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• Do you think the Consumer Price Index report will come off worse than March’s stats ?

• Do you think the Producer Price Index report will come off worse than March’s stats ?

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