Will we see a new tariff war?

What to look out for today

Companies reporting on Monday, 4 May: ON Semiconductor, Palantir Technologies, Pinterest, Tyson Foods, Vertex Pharmaceuticals

Key data to move markets today

EU: Spanish, French, German and Eurozone HCOB Manufacturing PMIs, Eurozone Sentix Investor Confidence and speeches by ECB Executive Board member Piero Cipollone and German Bundesbank President Joachim Nagel

UK: Markets closed for early May Bank holiday

USA: Factory Orders, Loan Officer Survey and a speech by New York Fed President John Williams

Global Macro Updates

Trump’s tariffs return. In a move that could further shock the global economy, on Friday President Trump said he was raising the tariff on automobiles from the European Union (EU) to 25% from 15%. He accused the EU of not complying with a trade agreement it signed last year. His announcement on tariffs came a week after the European Commission vice-president, Maroš Šefčovič, made a three-day trip to Washington, meeting with senior figures in President Trump’s administration, including the commerce secretary, Howard Lutnick, the US trade representative, Jamieson Greer and the treasury secretary, Scott Bessent. It was the first trip Šefčovič had made since the July EU-US tariff deal was signed.

A White House official said in a statement Friday that the EU has “failed to make substantial progress on their agreed-upon commitments.” Writing on Truth Social on Friday, President Trump stated, “Based on the fact the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States. The Tariff will be increased to 25%. It is fully understood and agreed that, if they produce Cars and Trucks in the USA Plants, there will be NO TARIFF.” 

According to Politico, a spokesperson for the European Commission said the bloc was implementing the Turnberry deal “in line with standard legislative practice, keeping the US administration fully informed throughout.”

As noted by CNBC, the US Supreme Court ruled in February that a large part of Trump’s tariff agenda was illegal. The president’s “reciprocal” tariffs were invoked using a novel reading of the International Emergency Economic Powers Act, or IEEPA, but the high court said in a 6-3 majority that the law that undergirds those import duties “does not authorise the President to impose tariffs.”

Good growth, but prices are rising. Economic data showed US factory activity expanded in April for the fourth consecutive month, but the prices-paid component, a signal of inflationary pressure, jumped to its hottest level in four years, according to the Institute for Supply Management. The data also revealed a sign of labour market cooling.

The ISM Manufacturing PMI remained unchanged in April, coming in at 52.7; slightly below expectations of 53.0. However, prices paid came in at 84.6, the highest level since April 2022 and significantly higher than the 80.0 reading expected. New orders were up, rising to 54.1 from 53.5 in March, yet production was down, coming in at 53.4 from 55.1 March, showing continued growth but at a slower pace. Employment was also less than expected, coming in at 46.4 vs. 49.0 expected, indicating a contraction in the labour market. There were also indications of rising supply bottlenecks emerging with supplier deliveries rising to 60.6 from March's 58.9 reading. 

US Stock Indices

Dow Jones Industrial Average -0.31%
Nasdaq 100 +0.94%
S&P 500 +0.29%, with 9 of the 11 sectors of the S&P 500 down

The S&P 500 and the Nasdaq advanced to record closing highs on Friday, boosted by robust earnings and a dip in crude prices. They both had their fifth consecutive week of gains.

The S&P 500 gained 21.11points, or +0.29%, to 7,230.12 points. The Nasdaq Composite gained 222.13 points, or +0.89%, to 25,114.44. However, the Dow Jones Industrial Average was down 152.87 points, or -0.31%, to 49,499.27 points on Friday.

The past week was an important week for corporate earnings as companies that accounted for more than two-fifths of the S&P 500's total market capitalisation reported. 

According to LSEG I/B/E/S data, Q1 2026 y/o/y earnings are expected to be 27.8%. This is an 11.7 percentage point increase from where the estimate stood a week ago, and marks the biggest earnings growth since the fourth quarter of 2021.

Excluding the Energy sector, the y/o/y earnings estimate is 29.3%. Of the 314 companies in the S&P 500 that have reported earnings to date for Q1 2026, 83.1% reported above analyst expectations. This compares to a long-term average of 67%.

The Q1 2026 y/o/y blended revenue growth estimate is 10.5%. If the Energy sector is excluded, the growth rate for the index is 11.0%.

In corporate news, Estée Lauder plans to cut as many as 3,000 more jobs and generate a further $200 million of savings to help boost its turnaround plan.

The Pentagon said on Friday it had reached agreements with SpaceX, OpenAI, Google, Nvidia, Reflection, Microsoft and Amazon Web Services to deploy their advanced capabilities on the Defence Department's classified network, providing more military access to their products for use on sensitive topics. However, the Trump administration has blacklisted Anthropic from participation over Anthropic’s insistence that the Pentagon include certain safety guardrails for the government’s use of AI in warfare. Defence Department Chief Technology Officer Emil Michael told CNBC on Friday that Anthropic remained a supply-chain risk. But he said Mythos, the company’s AI model with advanced cyber capabilities, is a “separate national security moment.”

S&P 500 Best performing sector

Information Technology +1.41%, with Sandisk +8.25%, Seagate Technology Holdings +7.91% and Oracle +6.47%

S&P 500 Worst performing sector

Energy -1.32%, with Occidental Petroleum -3.09%, EQT -2.36% and ONEOK -2.27%

Mega Caps

Alphabet +0.23%, Amazon +1.21%, Apple +3.24%, Meta Platforms -0.52%, Microsoft +1.63%, Nvidia -0.56% and Tesla +2.41%

Information Technology

Best performer: Sandisk +8.25%
Worst performer: Corning -3.64%

Materials and Mining

Best performer: International Paper +4.41%
Worst performer: CRH -2.51%

Corporate Earnings Reports

Posted on Friday, 1 May from The Pulse, our real-time AI-driven news tool. Available exclusively on the EXANTE Web Platform

Chevron reported Q1 2026 earnings with adjusted EPS of $1.41 beating estimates of $0.95, while revenue and other income reached $48.61 bn. missing consensus of $52.08 bn. Net oil-equivalent production was 3,858 MBOED exceeding expectations, upstream earnings hit $3.91 bn above estimates of $3.5 bn, and worldwide liquids production was 1,461 mb/d. The company declared a $1.78 per share dividend, reaffirmed 2026 guidance and 2030 targets and remains on track for $3-4 bn in structural cost reductions. Middle East conflict impacted less than 5% of production portfolio, with operations in Partitioned Zone at near minimum rates. CEO Mike Wirth highlighted potential to ramp Permian production for strong free cash flow.

ExxonMobil reported Q1 2026 earnings with adjusted EPS of $1.16 beating consensus of $1.00 and revenue of $85.14 bn exceeding estimates of $82.18 bn. Net production reached 4.6 mn oil-equivalent barrels per day including a Guyana quarterly record exceeding 900 thousand gross barrels per day despite Middle East disruptions equivalent to about 5% of total output. The company is on pace for $20 bn share repurchases in 2026 and $20 bn structural cost savings by 2030. ExxonMobil and Chevron resisted White House pressure to increase production. CEO Darren Woods highlighted improved Venezuela access, sustained Permian production, 15% output impacted by Strait of Hormuz closure and ongoing Qatar Ras Laffan repairs.

Estée Lauder reported Q3 fiscal 2026 results with net sales of $3,700 mn vs estimates of $3,689 mn and adjusted EPS of $0.91 versus estimates of $0.65. The company raised its full-year fiscal 2026 outlook for adjusted EPS to $2.35-2.45 versus estimates of $2.22 and for organic net sales and adjusted profitability. It announced a final net workforce reduction of 9,000-10,000 positions, expanding prior plans from 5,000 to a total of up to 10,000 job cuts through 2026 as part of a broader restructuring to save up to $1.2 bn annually. The restructuring includes a potential merger with Puig. It continues to expect tariff-related headwinds of approximately $100 mn in fiscal 2026 profitability 

European Stock Indices

CAC 40 French markets were closed for the Labour day holiday
DAX German markets were closed for the Labour day holiday
FTSE 100 -0.14%

Commodities

Gold spot +0.33% to $4,629.90 an ounce
Silver spot +2.66% to $76.00 an ounce
West Texas Intermediate -1.98% to $101.94 a barrel
Brent crude -2.02% to $108.17 a barrel

Gold rose on Friday, reversing earlier losses of more than 1%, after Iran submitted a new proposal for negotiations with the US which helped ease some inflation concerns. Spot gold was +0.33% to $4,629.90 per ounce. However, it was -1.96% over the week.

Spot silver also rose, up +2.66% to $76.00 per ounce on Friday. 

Oil fell on Friday after Iran submitted a new proposal for negotiations as traders weighed prospects for a deal to end the Iran war. President Donald Trump said he was not satisfied with the latest Iranian proposal, while Iran's foreign minister said Tehran was ready to talk. However, a senior United Arab Emirates official said on Friday that Tehran could not be trusted over any unilateral arrangements it makes for the Strait of Hormuz.

Brent crude futures for July settled at $108.17, down $2.23 a barrel, or -2.02%. West Texas Intermediate futures settled at $101.94 a barrel, down $3.13, or -2.98%. Both the Brent benchmark and WTI saw a +2.95% gain over the week. On Thursday, Brent's June contract hit $126.41 a barrel, marking the highest level since March 2022.

Note: As of 4 pm EDT 1 May 2026

Currencies

EUR -0.10% to $1.1722
GBP -0.21% to $1.3575
Bitcoin +2.5% to $78,355.7
Ethereum +1.78% to $2,303.88

On Friday, the US dollar was up, with the US dollar index rising +0.17% to 98.22. However, it was -0.30% for the week.

The euro edged down slightly against the dollar on Friday, -0.10% to $1.1722. The British pound declined -0.21% to 1.3575 after earlier hitting a 10-week high. 

The dollar experienced its biggest weekly loss against the Japanese yen since February after Japan was reported to have intervened to support its currency.

The dollar briefly slid from around ¥157.10 to ¥155.49 against the yen before recouping some losses after remarks from Vice Mimura. The dollar ended the trading session against the yen +0.26% to ¥157.04. According to Bloomberg analysis, Japan likely spent around ¥5.4 trillion, or roughly $34.5 billion, in foreign-exchange markets to prop up the yen. The yen has been under pressure due to the wide interest rate differentials between the US and Japan as well as by the surge in energy prices which has been supportive to the US dollar. 

Fixed Income

US 10-year Bond -0.8 basis points to 4.381%
European bond markets closed on 1 May
UK 10-year gilt -5.2 basis points to 4.981%

On Friday, US Treasury yields were little changed after data on US factory activity showed an expansion in April that was slightly below expectation. 

The yield on the two-year note, which often reflects Fed fund rate expectations, was +0.5 bps to 3.890%. The yield on the US 10-year note edged down -0.8 bps to 4.381%. On the long-end, the 30-year yield was -1.9 bps to 4.190%.

The yield curve between the two-year and 10-year notes flattened to 49.1 bps from Thursday’s 50.4 bps.

The 10-year yield was +7.7 bps over the 7 days, while the 2-year yield was +11.2 bps and the 30-year was +5.9 bps. 

According to CME Group's FedWatch Tool, Fed funds futures traders are pricing a 7.2% chance of a 25 bps rate cut at the June meeting, up from 5.3% a week ago. 

The US Treasury is likely to keep bond-auction sizes steady for a ninth straight quarter when it announces financing plans on Monday and Wednesday. The announcements will outline government financing plans for the Q2 and Q3, including auction sizes for 3, 10 and 30-year bonds. However, with the government due to release its tariff refund rules, there is increasing investor concern around whether and when the government will increase its issuance of long-term debt. 

Across the pond, in the UK, 10-year gilt fell -5.2 bps to 4.981%, the 30-year declined -3.7 bps to 5.635% and the 2-year yield was down -6.2 bps to 4.83%.

Bond markets were closed across the eurozone on Friday due to the Labour day holiday.

Note: As of 4 pm EDT 1 May 2026

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