April just closed as the best month for the S&P 500 in five years. The Nasdaq crossed 25,000 for the first time. Five of the Magnificent Seven beat earnings. Eighty percent of the S&P 500 beat estimates. The market spent the whole week asking hard questions — about AI spending, about the Fed, about oil, about the customer. By Friday afternoon, it had its answers. And it bought everything.

Clean finish to a big month. The S&P 500 gained 0.5% to another record. The Nasdaq rose 0.7% and crossed 25,000 for the first time — the kind of round number that gets on the evening news. The Dow was roughly flat. The Russell 2000 was the leader again, up 2.2%. For the month, the S&P gained about 10%. The Nasdaq gained 14%. Both are the best monthly returns since April 2020.

Apple closed the week. The stock rose nearly 5% on Friday after beating on earnings and revenue. The iPhone 17 drove "extraordinary" demand. Gross margin came in at 49.3% — well above the 48.4% the Street expected — on the back of services revenue strength. Apple warned about rising memory costs, same as Microsoft and Meta, but the market looked through it. Services growing faster than hardware is the story Apple has been pitching for five years. Today the market paid for it.

Iran moved. Reports surfaced that Iran sent a new proposal to the U.S. through Pakistani mediators. Oil pulled back — WTI traded around $102, down from the $115 Brent we saw mid-week. Trump said nobody knows the status of talks except him and a few others. The market read that as "talks are happening" and took it as a reason to bid risk.

The odd ones: Spirit Airlines down 60% after the Wall Street Journal reported it's preparing to shut down — the bailout fell apart and the airline couldn't get bondholders to commit. Roblox down 24% after slashing full-year guidance and warning about "continued short-term friction." Estée Lauder up 12% on a beat-and-raise. Moderna up 7% on overseas COVID vaccine sales.

Earnings season by the numbers: 80% of S&P 500 companies that have reported beat on EPS. Year-over-year earnings growth is running at 31%, beating estimates by 23 points. Nine of the eleven sectors are printing double-digit earnings growth. That's the broadest earnings strength since 2021.

Stocks don't price today. They price the next six to twelve months. And what the market priced this week is the clearest answer it has given in a year.

This was the hardest stress test the rally has faced. On Monday the hyperscaler moat broke. On Tuesday the AI customer's revenue got questioned. On Wednesday the Fed split four ways with the most hawkish dissent in 33 years. On Thursday inflation came in hot and GDP came in soft. On Friday oil was still above $100. The market took all five of those punches and closed at a record. That tells you something.

Here's what it tells you. The earnings cycle is stronger than the macro headwinds. When 80% of companies beat and earnings growth is running at 31%, the market can look through a hawkish Fed, a 3.2% core PCE, a $100-plus barrel of oil, and a GDP print that missed. It can't do that forever — eventually inflation or energy costs eat the margins. But right now, the cash is coming in faster than the risks are growing. That's all the market needed to know.

The broadening is the real story. Yesterday, ten of eleven sectors finished in the green. Today, the Russell 2000 gained 2.2% while the Dow was flat. That's the market telling you the rally has legs beyond the Magnificent Seven. Caterpillar, Eli Lilly, Qualcomm, Royal Caribbean — none of those names were leading the tape three months ago. Now they are. When the winners list gets wider, the rally gets harder to kill. On Wall Street, this is what they call breadth — the number of stocks going up versus the number going down. When breadth is strong, one bad name or one bad sector can't take the whole market with it. That's what changed this week.

I've seen this setup once before in this generation. April 2020. That was the last time the S&P had a month this good — up 12.7%. The market was pricing through a crisis, just like now. The difference: in 2020 the Fed was cutting to zero and buying everything in sight. In 2026 the Fed is holding at 3.75% and the dissenters want to be more hawkish. This rally is happening despite the Fed, not because of it. That makes it more durable if earnings hold — and more fragile if they don't.

The forward-looking read: the AI capex story split into winners and losers this week, but the total spend is confirmed at $700 billion for 2026. The market is rewarding companies that show revenue growing with the capex — Alphabet, Apple, Amazon — and punishing companies where capex is running ahead of the cash flow — Meta, Microsoft. That's healthy. It means the market is doing the work of sorting good bets from bad bets, instead of bidding everything up together. May will test whether the breadth holds through the next wave of earnings and the first full month under Kevin Warsh.

Three things I'm watching next week:

The chip story isn't finished. AMD reports Monday, Arm Tuesday. Both names fell hard on Tuesday's OpenAI report and need to show that demand beyond OpenAI is real. If AMD's data center revenue holds above $5 billion and Arm's royalty growth stays above 20%, the chip rally that's been running since March gets a fresh leg. If either name disappoints, the order-book reset from Tuesday comes back into the conversation.

This is the labor market's report card after a hot PCE and a hawkish Fed. Consensus is around 130,000 jobs, with unemployment at 4.3%. Wages are the line that matters most. Average hourly earnings above 4% locks the Fed into its current stance for the rest of the summer. Under 3.6% gives Warsh the opening he'll want for his first meeting. March's wage growth came in at 3.5% — the lowest since May 2021. If that trend holds, the rate-cut math comes back to life.

The market bid up on reports that Iran sent a new peace proposal through Pakistan. Oil pulled back from the $115 Brent we saw Wednesday. Over the weekend we'll learn whether the U.S. responds seriously or whether Trump uses it to extend the blockade. If talks break through and the Strait reopens, oil falls hard and the Fed's path to a cut gets easier. If talks stall again, the $6-a-gallon gas that just hit California becomes the summer story.

The market just had the biggest earnings week in three years and came out the other side at a record. The breadth held. The rotation held. Now the question is whether May can hold what April built.

That's it for today. Have a good weekend. I'll be back on Monday after the close.