The US equity market’s ability to sustain a bull run through a genuinely difficult macro environment came into sharp focus this week as the S&P 500 (NYSE: SPY) logged its eighth consecutive weekly gain, the longest such streak since late 2023, while simultaneously absorbing the highest long-term bond yields in nearly two decades, a deteriorating consumer sentiment reading, and an oil market that has traded above $100 per barrel for much of the spring.
What the market has consistently demonstrated through each of these headwinds is that geopolitical optimism around the Iran conflict, when it emerges, is strong enough to override most other negative inputs.
The week’s narrative was built around bond market anxiety and geopolitical signal-reading in roughly equal measure. Monday and Tuesday saw the 30-year Treasury yield touch its highest level since 2007, with the 10-year approaching multi-year peaks driven by investor concern about the fiscal implications of the Iran war and the inflationary persistence it is embedding through energy prices. That yield spike compressed equity valuations, particularly in rate-sensitive sectors, and produced two consecutive sessions of meaningful market weakness.
The turning point came midweek when diplomatic language softened. Trump told reporters on Wednesday that the US was in the “final stages” of negotiations with Iran, and Secretary of State Marco Rubio added on Thursday that there were “good signs” peace was within reach, while flagging that control of Strait of Hormuz shipping remained a sticking point. Those signals were enough to pull Treasury yields back from their extremes, with the 10-year retreating to 4.56% and the 30-year dropping to around 5.06% by Friday afternoon. The market treated that yield retreat as permission to buy equities.
The week’s most striking individual story was Qualcomm (NASDAQ: QCOM), whose shares gained 18.2% over the five sessions, including nearly 12% in Friday’s session alone, as investors rotated into technology names benefiting from the broader semiconductor cycle. Qualcomm’s exposure to AI-adjacent chip demand and its improving handset market position made it a natural beneficiary of a week when markets wanted to hold something with structural growth catalysts.
Goldman Sachs issued a notable warning that rising yields and persistent inflation could still trigger a correction if the peace negotiations with Iran stall or collapse. That risk cannot be dismissed. The 30-year yield briefly touching 5.09% earlier in the week represents a level that historically introduces genuine valuation stress for equities, particularly growth stocks trading at stretched multiples. The Dow’s ability to record a closing high on Friday while the 30-year remains above 5% is a striking divergence that either reflects rational optimism about the conflict ending soon or a degree of complacency about the rate environment.
Consumer sentiment data from the University of Michigan, released Friday, fell to a fresh low for 2026, with households citing fuel costs and rising inflation as the primary sources of financial stress. That reading matters because it speaks to the demand environment that corporate America will be navigating in Q2 and beyond. When consumer confidence falls this sharply and persistently, discretionary spending typically follows with a lag, which means the Q2 earnings season beginning in July will be a genuine test of whether the equity market’s optimism is justified.
US markets are closed on Monday for Memorial Day. The next significant catalysts arrive later in the week with earnings from AutoZone, Salesforce, Dick’s Sporting Goods, and Marvell Technology, alongside April new home sales data that will test the housing sector’s resilience against mortgage rates that remain elevated relative to the pre-Iran-conflict environment. How those numbers land will shape whether the S&P 500’s eighth weekly gain becomes a ninth.
