Welcome to what may be the most consequential week of May.

Friday delivered two contradictory headlines in the same session. The U.S. economy added 115,000 jobs in April — more than double the 55,000 consensus estimate, marking the first back-to-back monthly gain in nearly a year.</a> The Nasdaq hit 26,000 for the first time in history. The S&P 500 posted its sixth consecutive winning week — the longest such streak since 2024.

And then — as markets were celebrating — Trump rejected Iran's latest peace proposals as "totally unacceptable." Oil bounced back above $100. A fresh military exchange occurred near the Strait of Hormuz. The 14-point memorandum framework that drove Wednesday's record highs is now, at least temporarily, dead.

This morning, S&P 500 futures are trading just below all-time highs. Brent crude is above $103. Oil is 3%+ higher after Netanyahu warned the conflict is "not over." The week ahead brings April CPI on Tuesday — the most important inflation reading of the year — alongside April PPI, weekly claims, and the first Michigan consumer sentiment reading of May.

Two genuinely contradictory realities. Let's set the table for the week.

The headline: +115,000 jobs. The consensus: 55,000. The reaction: markets surged.

Now read the fine print.

Among industries, healthcare led with 37,000 new positions, transportation and warehousing added 30,000, retail contributed 22,000, and social assistance added 17,000. The standout loser was information, cutting 13,000 jobs — a continuation of a longer slide that has stripped the sector of 342,000 positions, roughly 11% of its workforce, since its November 2022 peak.

Wage growth disappointed. Private-sector average hourly earnings climbed just 0.2% for the month and 3.6% year-over-year — below the 0.3% and 3.8% forecasts. The number of people working part time for economic reasons rose by 445,000 to 4.9 million. The broader U-6 underemployment gauge reached 8.2%. The labor force participation rate fell to 61.8% — its lowest since October 2021.

Federal government employment continued to decline, losing 9,000 positions in April. Federal employment has now fallen by 348,000 — roughly 11.5% — since October 2024.

Here is the honest read heading into this week. The headline beat is real and meaningful — 115,000 jobs in a war-disrupted, high-inflation environment is genuinely better than feared. But healthcare and transportation did the heavy lifting. Information technology is shedding jobs. Part-time employment is surging. Participation is falling.

Austan Goolsbee of the Chicago Fed put it precisely: The labor market has been pretty much stable for a year, year and a half." Stable is not the same as strong. The most important number for the Fed is wage growth of just 3.6% year-over-year — below the 3.8% expected. If wages are not accelerating, the inflation spiral risk diminishes and Kevin Warsh has more room to hold — or eventually cut. Watch how that wage reading interacts with Tuesday's CPI.

Friday's Iran headline deserves its own section because it defines the entire week's market setup.

Trump deemed Tehran's latest proposals "totally unacceptable," dashing optimism that had driven Wednesday's record highs. Brent advanced more than 2% to above $103 a barrel as the Strait of Hormuz remained shut. Netanyahu declared the conflict "not over." A fresh military exchange occurred near the Strait on Friday. This morning, oil prices are jumping again, with WTI at $99.09 and Brent at $104.71, as deal hope fades and military tensions return.

Here is what distinguishes this breakdown from the five previous ceasefire collapses. Both sides have now formally exchanged written proposals for the first time since the war began. The architecture of negotiation — a specific document, specific articles, a formal response — exists in a way it did not before Islamabad. A rejected proposal is not the same as no proposal. It is the beginning of a negotiation, not the end of one.

Pakistan is still actively mediating. The TACO trade has been wrong exactly zero times in 70 days. But "totally unacceptable" and fresh military exchanges require monitoring. Watch Truth Social. Watch Pakistan's foreign ministry. The next diplomatic signal — in either direction — is the most important market variable of the week.

For stewards: Blackrock CIO Rick Rieder said this weekend: "The economy may slow somewhat from its prior path due to the Iran war and subsequent oil price shock, but there are many much larger structural components that should keep the aggregate economy in much better shape than many people expect." Resilient fundamentals as the floor. Iran as the ongoing ceiling. That framing holds going into Monday's open.

The S&P 500 and Nasdaq each posted their sixth consecutive winning week — the first such streak for both since 2024. The Nasdaq closed at 26,247.08, its first close above 26,000 in history. The S&P technology sector surged 3.27% on Friday alone, up nearly 35% since April 27.

Let those numbers sit for a moment. Thirty-five percent in eleven trading sessions. That is not a rally. That is a repricing event. And it was driven by a remarkably narrow group of stocks. The Financial Times noted this week that more than half of the S&P 500's recent gains came from just five companies: Alphabet, Broadcom, Amazon, Nvidia, and Apple. The other 495 companies are passengers.

Paul Tudor Jones compared this week to 1999 on CNBC. He is not predicting an imminent crash — he is saying there may be "another year or two" left, just as 1999 had more room to run before the peak. The faithful steward does not dismiss that comparison. They hold it in the framework, size their positions accordingly, and watch Tuesday's CPI for the signal that tells us whether the fundamental underpinning of this rally — a Fed that can hold rates steady while AI generates earnings — remains intact.

S&P 500 futures are trading just below all-time highs this morning. Investors this week will focus on the April CPI and PPI, which may offer fresh insight into how the war is impacting inflation. If CPI is hot, the rally's foundation gets tested. If CPI holds steady or comes in cooler than feared, the seven-week winning streak may be within reach.

"I have learned, in whatever state I am, to be content." — Philippians 4:11

We began Bread & Bull with this verse. We returned to it at Berkshire. We return to it again this Monday morning.

Friday: the Nasdaq hit 26,000 and the Iran deal collapsed in the same session. This morning: oil is above $103 and S&P futures are near all-time highs simultaneously. The scoreboard swings faster than any model can predict.

Philippians 4:11 is not a verse about complacency. Paul was one of the most active, strategic, disciplined people in history. But he had learned — and he uses that word deliberately, "learned" — to be content regardless of what the scoreboard showed. Not euphoric at the highs. Not despairing at the lows. Steady.

The faithful steward who has been with us for 70 days of this conflict has practiced that discipline. They did not panic when oil hit $126. They did not chase when the Nasdaq hit 26,000. They held the framework. They sized the positions. They set the stops. They stayed informed.

This week tests that discipline again. April CPI on Tuesday. PPI on Wednesday. Iran ongoing. Nvidia in ten days. The work of stewardship is never finished. It is only practiced.

We will be here every step of the way.

Seventy days into this conflict. The Nasdaq is at 26,000. The jobs report beat by double. Six straight winning weeks. Iran rejected the deal. Trump rejected their counter. Oil is above $103 this morning. April CPI lands tomorrow.

We will be here before the open.

Stay steady. Stay disciplined. Stay grounded.

Nathan Grey
Senior Editor
Bread & Bull