Jobs Data Parade Starts as Middle East Fears Rise

0:05Welcome to the Schwab Market Update Podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead. I'm Colette O 'Claire, and here is Schwab's early look at the markets for Tuesday, May 5th. Earnings and jobs data accelerate today after the week got off to a shaky start on a resurgence of Middle East violence that pushed oil and Treasury yields up Monday. News of Iranian attacks against a United Arab Emirates oil installation and on ships traversing the Strait of Hormuz, sent Brent crude to$114 per barrel, temporarily shifting market focus to geopolitical risk.

0:49U.S. crude rose 3 percent. Even so, the S &P 500 index and Nasdaq Composite remain near Friday's all-time highs, buttressed by impressive earnings growth that's near 28 percent year-over-year, though that includes dramatic gains for so-called hyperscalers and AI chip firms. This week turns the focus squarely to jobs, starting with today's March job openings and labor turnover surveyor jolts due at 10 a.m. Eastern Time. Analysts expect around 6.8 million openings, off slightly from 6.9 million in February. March is the first month to reflect hiring impact from the war and rising oil prices, while job openings generally remain well below levels of the last few years.

1:37The quit rate in the JOLTS report could be another important focus, showing whether employees felt comfortable hopping to new jobs in an economy characterized by low employment growth. Quits were 2.95 million in February and are expected to stay in that area in March, according to consensus from analysts. We'll be watching the quits rate that's been holding near 2 percent or below since last summer, and any additional declines would suggest more weakness under the surface than what the headline unemployment rate suggests, said Colin Martin, head of Fixed Income Research and Strategy at the Schwab Center for Financial Research, or SCIFR.

2:16New home sales round out today's data parade with a forecast for slight monthly increases. Tomorrow morning features April monthly jobs growth from ADP, which tracks private sector hiring. The main event is Friday morning when the government puts out its April non-farm payrolls report. Estimates have been falling to around 60 ,000 early this week from 75 ,000 a week ago. The March total was a solid 178 ,000, but the government has a long track record of downward revisions, meaning that the number might drop. Low monthly job gains aren't necessarily as bad as initially expected since the breakover rate of jobs.

2:58The gains needed to keep the unemployment rate steady is low today, Martin said. The unemployment rate has been held between 4 % and 4.5 % for 21 straight months. In data yesterday, March factory orders surged 1.5 % month over month versus the briefing.com consensus of 0.5 % and February's flat tally. Data to watch today include the ISM non-manufacturing index for April, which is seen at 53.9%, down from 54 % in March, but above the 50 % needed for expansion. Palantir, a major tech barometer and a company that's made headway using AI in its products, reported late Monday and topped analysts' estimates.

3:45Revenue rose nearly 85 percent from a year ago, and the company's guidance for the second quarter and fiscal year surpassed fact-set consensus. Nevertheless, shares initially fell slightly in post-market action. They still trade at a high price to earnings or PE, but are down sharply from peaks last fall.

4:09Today's a busy earnings day, highlighted by Shopify, Pfizer, and Anheuser-Busch this morning. Arguably, the key event comes after the close when Advanced Micro Devices, a leading AI chip firm, reports. The consensus earnings per share estimate is$1.29. Last time out, Advanced Micro Devices or AMD, beat analysts' earnings and revenue consensus but appeared to disappoint investors with what some felt was conservative guidance, sending shares to initial sharp losses. The company said then it expected$9.8 billion in first quarter revenue, a number to keep in mind later today. Another item to watch is any updates on the company's new integrated server-scale AI system Helios, which AMD said in February is on schedule to begin ramping in the second half.

5:01Though geopolitics remains a concern, the market is mainly focused on earnings and may continue to look through the Iran situation until data suggests a higher probability of recession or stagflation, said Nathan Peterson, director of derivatives research and strategy at Skiffer. Earnings to date can take credit for most of the recent index rally, with more than 60 percent of S &P 500 firms reporting. About 84 percent have beaten analyst expectations. Another 20 percent of S &P 500 firms report this week, though most of the largest are now in the books. NVIDIA awaits later this month. Earnings from Berkshire Hathaway over the weekend, meanwhile, came in above expectations, while the company's cash hoard grew to nearly$400 billion.

5:51The company's reluctance to spend came as former CEO Warren Buffett said it's not an ideal investing environment, CNBC reported, noting a gambling mood in the market. Treasury yields popped above 4.4 % for the 10-year note and tested 5 % for the 30-year bond Monday, driven by the inflationary impact of higher oil prices. The 10-year yield is now at five-week highs. We expect the 10-year Treasury yield to hold in the 4 % to 4.5 % area for the time being, but there could be more upside if the conflict in the Middle East continues, Martin said. Another source of pressure on Treasuries, which moved the opposite direction of their yields, came late Monday when the U.S.

6:39Treasury said it expects to borrow$79 billion more this quarter than it estimated in February. Major indexes stumbled to start the week, burdened by rising Middle East tensions and the related jump in yields. Though all the major indexes gave ground and volatility intensified, the tech sector suffered less damage, leading to narrower losses for the Nasdaq composite. Almost every S &P 500 sector slipped Monday, the second straight session of poor performance from a sector perspective, and perhaps a sign that the surging tech sector can't carry the entire market on its back. Infotech, up nearly 17 percent over the last month, was second to energy on Monday, as energy represented the only green spot on the sector scorecard.

7:27Healthcare had the worst day, down more than 1 percent, as Johnson & Johnson slumped. Checking Monday's individual movers, eBay climbed 5 % on media reports that GameStop is making a $56 billion takeover bid for eBay. GameStop fell 10 % on the news. Norwegian Cruise Line sank 8.5 % after the company's earnings report came in mixed. The cruise company beat analysts' earnings estimates but came up short on revenue and guided for second quarter and full-year fiscal 2026 earnings below consensus, citing disruptions in the Middle East and high fuel prices. Shares of retailers including Lowe's, Best Buy, Gap, and Home Depot all fell amid advancing oil prices and rising yields, which make it tougher for consumers to make big purchases.

8:19Advanced microdevices fell more than 5 % Monday as investors prepared for its earnings this afternoon, heard by a downgrade to hold from buy at HSBC. The firm sees limited upside to Advanced Microdevices' first quarter estimates, saying 2026 server upside will be capped by foundry capacity constraints. If that's the case, AMD might have trouble meeting strong demand for central processing units or CPUs. Competition from Intel with its own foundry is another factor. Shares of crypto-related stocks, including Circle Internet Group and Coinbase Global, popped on news reports that the Senate has reached a bipartisan agreement on language in the Clarity Act, a digital asset marketing structure bill.

9:07Should the Clarity Act pass, it may offer a new narrative for the crypto market on top of a relatively neutral macro backdrop, said Jim Ferrioli, director of crypto research and strategy at Skiffer. Shares of Circle climbed almost 20 percent. FedEx fell 9 percent, and United Parcel Service fell 10 percent after Amazon announced the launch of Amazon Supply Chain Services, which Amazon said extends the company's entire portfolio of freight, distribution, fulfillment, and parcel shipping solutions to businesses of all types and sizes. This pressured the Dow Jones Transportation Average, which slid nearly 5%.

9:49Pinterest soared 17 % in post-market trading Monday as earnings and guidance topped consensus. Home building shares, including Lenar, KB Home, and D.R. Horton, all fell sharply as yields rose, which could make mortgages harder to finance. The Dow Jones Industrial Average slid 557.37 points Monday, or 1.13%, to 48 ,941.90. The S &P 500 Index shed 29.37 points, or 0.41%, to 7 ,200.75. and the Nasdaq Composite gave back 46.64 points or 0.19 % to 25 ,067.80. This has been the Schwab Market Update podcast. To stay informed, visit schwab.com slash market update or follow for free in your favorite podcasting app.

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11:08For important disclosures, see the show notes and schwab.com slash marketupdatepodcast.