Perspective: Morning Commentary for May 7

By: Mike Castle, Market Intelligence - Fertilizer Analyst

Thu, 07 May 2026, 13:20

Guest Commentary by Mike Castle

Senior Commodities Economist

May 7 – Wall Street is looking at a relatively quiet start to the day, with stock futures pointing to a narrowly higher open to add onto yesterday’s huge gains that saw fresh record closes in both the Nasdaq and S&P 500, while the VIX is roughly unchanged as it remains relatively muted near the 17.4 level. A sense of optimism underpins the ongoing unease in the Middle East as tech strength and better than expected U.S. labor market data remain the feature. The dollar is narrowly in the red to start the day, adding to yesterday's losses, as it trades just below the 97.9 level. Treasuries are also down slightly, with 10-year yields trading at 4.33% and 2-year yields trading at 3.845%. Crude oil is down notably again this morning, with nearby WTI off ~4.7% on the day to trade around $91.60 at the time of writing and nearby Brent off ~3.6% to trade near $97.60. The weakness in crude is continuing to take its toll on the broader commodity sector, with the grains and oilseeds widely lower again after sharp losses yesterday, save for soybean meal holding in the green.

Iran is reportedly reviewing the one-page memorandum to end the hostilities and open the Strait of Hormuz while beginning a 30-day window for negotiations on the true issues of contention. The Iranian side has cast doubt on the deal, but the ongoing euphoria in the tech sector driving broader strength keeps the market content to look past the tension for now as we await their official response. We’re not without escalation either, with U.S. Central Command yesterday confirming it struck and disabled an Iranian-flagged unladen oil tanker attempting to surpass the blockade and load in Iran. Additionally, Israel carried out its first attack on the Lebanese capital of Beirut since last month’s ceasefire, claiming to have killed a commander of Hezbollah’s Radwan force. Separately, an Israeli air strike in Gaza City yesterday reportedly killed another son of Hamas leader Khalil al-Hayya. Given the ties between Iran’s IRGC and both Hezbollah and Hamas, it will be interesting to see how recent developments influence the broader willingness to engage with a streamlined agreement.

First-time claims for unemployment benefits came in below expectations at 200k in the week ending May 2, up slightly from the upwardly revised 190k in the week prior but again below the average analyst estimate of a larger rebound to 205k. Excluding the week prior, this would represent the lowest week of initial claims in over two years, dating back to February 2024. Continuing jobless claims also came in below estimates at 1.766 million, a third straight weekly decline that also puts continuing claims at their lowest level in over two years. The four-week moving average for jobless claims fell to 203.25k; I probably sound like a broken record at this point, but again this is the lowest level for the metric in over two years. This continues to point to a more resilient than expected U.S. labor market, further buoying market sentiment.

Non-farm unit labor costs in the U.S. rose by 2.3% in the first quarter of 2026 according to this morning’s preliminary estimates, coming in at half of the previous quarter’s upwardly-revised 4.6% rise and below market expectations of a more modest decline to 2.6%. This paints a somewhat friendlier than expected inflation backdrop to potentially help absorb some of the incoming energy shock, though it’s worth noting there are still underlying pressures at the core level that will be worth keeping an eye on in next week’s CPI and PPI readings for the month of April. Labor productivity in the first quarter was slightly on the disappointing side at first glance, rising at 0.8% quarter-on-quarter versus market expectations of 1.0% while the prior quarter was revised down slightly to 1.6% from the 1.8% previously reported. The market is still looking for notable improvements in U.S. labor productivity amid the ongoing AI boom. While today’s quarter-on-quarter reading was a bit softer than expected, there were still silver linings in the data, with year-on-year labor productivity up 2.9%, the largest increase seen since the third quarter of 2024.

U.S. employers announced 83.39k job cuts in the month of April, up from 60.62k in March and marking a three-month high. For comparison’s sake, this is 20.6% below the same month last year and just a tick above the previous three-year April average; cumulative job cuts through the first four months of 2026 sit at 300.75k, down 50.1% versus the same span last year. The tech sector led the way, announcing 33.36k cuts in April, followed by warehousing at 5.74k, and services at 4.11k. For the second consecutive month, the top reason cited by employers for cuts was artificial intelligence, with many tasks now being automated. A final interesting note from this morning’s Challenger Report was a quote from Andy Challenger saying, “regardless of whether individual jobs are being replaced by AI, the money for those roles is.” This is an aspect of the current AI-driven tech boom worth keeping in mind moving forward, but for now the market is content to focus on the headline spending plans and earnings growth as we continue to push further into record high territory.

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Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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