Opening Bell - Morning Commentary - 06 May 2026

Strong Corporate Earnings and Drop in Crude Oil Prices Drive Wall Street to Record Highs

U.S. President Donald Trump said the U.S. would pause operations aimed at restoring shipping through the Strait of Hormuz, signalling that a deal with Iran could be nearing. However, the naval blockade against Iran will remain in place.

Oil prices fell after President Trump signalled a pause in the U.S. operation to reopen the Strait of Hormuz, raising hopes for a possible diplomatic deal with Iran.

U.S. equity markets rallied on Tuesday, with the S&P 500 and Nasdaq Composite both closing at all-time highs. Investor sentiment was bolstered by a 4% decline in Brent crude oil prices, allowing the market to pivot from geopolitical concerns to strong corporate performance.

The S&P 500 rose 0.81%, hitting a new all-time high and closing at a record of 7259. The Nasdaq gained 1.03%, touching a new high and closing at a record 25,326. The Dow added 356 points, or 0.73%, to end at 49298.

The chipmaking industry provided a significant lift to broader benchmarks, driven by Micron’s double-digit surge following the launch of high-capacity storage products. Additional strength came from Intel hitting an all-time high. Advanced Micro Devices reported Q1 earnings and guidance that topped Wall Street estimates, driven by a 57% surge in data centre revenue as demand for AI infrastructure accelerated.

Alphabet shares rose 2% in after-hours trading following reports that AI startup Anthropic committed to a massive spending deal on Google Cloud infrastructure. The news reinforced Alphabet’s position as a key player in the AI cloud arms race, complementing broader strength in the tech sector.

Approximately 63% of S&P 500 companies have reported their first-quarter results, with an impressive 84% exceeding earnings estimates. This performance is notably higher than long-term averages, with mega-cap technology firms like Alphabet and Amazon contributing significantly to the index’s growth rate.

The blended yoy earnings growth rate for Q1 2026 reached 27.1% as the quarter progressed, a sharp increase from the initial estimate of 13.1% at the start. This marks the sixth consecutive quarter of double-digit earnings growth.

The U.S. labour market showed signs of recovery. Job openings eased marginally in March, but hiring rose sharply to 5.55 million, the highest level since February 2024, indicating improving labour demand.

U.S. services activity slowed modestly in April, with the ISM non-manufacturing PMI easing to 53.6 from 54.0 in March, as businesses continued to flag concerns around rising energy-related costs.

The Asian indices opened higher today, tracking Wall Street gains overnight after oil prices dropped and strong earnings lifted investor sentiment. South Korea’s Kospi advanced 4.50% to scale a new peak, building on its more than 70% gains this year so far.

The Indian rupee weakened further, hitting a fresh record low amid escalating geopolitical tensions in the Middle East and the ongoing Russia-Ukraine conflict, raising concerns about a global inflationary surge. Elevated crude oil prices, coupled with risk aversion, have intensified fears of a widening Balance of Payments deficit. Persistent capital outflows and a cautious central bank stance have added to the pressure.

The Union Cabinet cleared an emergency credit guarantee scheme for aviation and MSMEs, along with a higher sugarcane price for 2026–27 and a ₹5,659 crore cotton productivity mission. The scheme provides additional working capital support, backed by government guarantees through the National Credit Guarantee Trustee Company Limited.

Nifty extended its alternating pattern of one-day gains followed by declines, slipping 86 points to close at 24032 after yesterday’s up move

Nifty has been consolidating around 24180 over the past six trading sessions. Immediate support remains at 23800, while 24334 and 24600 are likely to act as short-term resistance levels.

Indian markets are likely to open higher on strong US and Asian market cues.