US equities soar as Trump’s ‘Operation Project Freedom’ fuels Hormuz drama

Wall Street shrugs off oil shock

United States (US) equity markets closed mixed on Friday, with the S&P 500 and the Nasdaq 100 hitting fresh record highs on the back of strong corporate earnings and artificial intelligence (AI) enthusiasm reaching fever pitch. Meanwhile, the Dow Jones finished modestly lower.

For the week, the S&P 500 (+0.91%) and Nasdaq 100 (+1.49%) both recorded their sixth straight weekly gain, their longest run since October 2024, capping what have been their strongest monthly performances in years.

This resilient performance came despite crude oil jumping almost 8% last week to $101.94, although it later pulled back sharply from its intra‑week high of $110.93. That pullback followed Iran submitting a new proposal on Friday for peace talks with the US.

While there is hope the latest attempt could help break the stalemate in the Middle East, the proposal still appears to sidestep the critical issue of nuclear weapons. President Trump has repeatedly made it clear there is no chance of a deal that does not include prohibiting Iran from obtaining a nuclear weapon.

Hormuz tensions take a new turn

As the waiting game drags on and the Strait of Hormuz remains effectively closed, with the world burning through commercial stockpiles, strategic reserves and crude held in floating storage, events over the weekend took another dramatic turn.

President Trump announced via social media that the US would begin naval escorts for countries not involved in the Middle East dispute through the Strait of Hormuz. This initiative, dubbed ‘Operation Project Freedom’, is being positioned as a humanitarian gesture on behalf of the US.

In the same post, Trump also noted that negotiations with Iran are heading in a positive direction, but simultaneously issued a stark warning: ‘If any way this humanitarian process is interfered with, that interference will unfortunately have to be dealt with forcefully.’

Whether Operation Project Freedom actually proceeds, or proves to be the latest in a long line of initiatives and threats that fail to gain traction or are later walked back, remains to be seen. If it does proceed, whether Iran will allow safe passage or instead chooses to fire on escorted vessels is another open question.

Earnings and data in focus

Looking ahead and beyond the Middle East drama, first quarter (Q1) earnings season continues. Companies including Advanced Micro Devices (AMD), Palantir, McDonald’s, Disney, Uber and Pfizer are all set to report.

On the economic front, the labour market will be under close scrutiny, with Job Openings and Labor Turnover Survey (JOLTS) job openings, Automated Data Processing (ADP) employment data and the main event, non‑farm payrolls, outlined below.

Non‑farm payrolls, April

Date: Friday, 8 May at 1.30pm BST

For March, US non‑farm payrolls rose by 178,000, a sharp rebound from February’s revised -133,000 contraction and well above the 60,000 consensus forecast. The unemployment rate edged lower to 4.3% from 4.4%, while average hourly earnings rose a modest 0.2% month-on-month (MoM), taking the annual pace down to 3.5%, the slowest since May 2021.

After the volatility of recent months, the April report will be watched closely for confirmation that the labour market remains resilient, or whether weakness re‑emerges, especially after the Federal Reserve (Fed) pivoted towards a more neutral stance at last week’s Federal Open Market Committee (FOMC) meeting.

Consensus for April points to a more moderate gain of 63,000 jobs, with the unemployment rate expected to hold steady at 4.3%. Ahead of this, US interest rate markets are pricing the Fed on hold for the remainder of 2026, a far cry from the 60 basis points (bp) of rate cuts priced at the end of February.

US unemployment rate chart

Nasdaq 100 technical analysis

The Nasdaq 100 began a correction after hitting its late-October record high of 26,182, before bottoming at the late March low of 22,841. From there it has mounted an incredible rally that has taken it to new highs and well beyond.  

For those with a longer‑term horizon who are comfortable with periods of consolidation, having already reached the 27,500 level, we remain open‑minded that the index could push towards 30,000 by year end.

However, for those operating on a shorter‑term timeframe, these current elevated levels do not present a compelling buy or sell opportunity.

Nasdaq 100 daily candlestick chart

Dow Jones technical analysis

After a 38% rally from the Liberation Day lows the Dow Jones hit a fresh record high of 50,512 in Mid-February before commencing a correction back to support at 45,000.  

The subsequent rally from those lows has brought the index back toward resistance at 50,000 – 50,500, the zone of this year’s earlier record high.  

While some near-term consolidation cannot be ruled out, a retest of the 50,512 all-time high remains the most likely path, with scope for a further push toward 52,000 thereafter. 

Dow Jones daily candlestick chart

• _{Source: TradingView. The figures stated are as of 4 May 2026. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}