The Profit Margin: May 4, 2026
Statistic of the Week
Socio-economic factors are increasingly influencing the adoption of AI in the
workplace. Among workers earning over $200,000, 66.3% reported using AI tools
over the past 12 months, compared to just 15.9% of those earning under $50,000.
Education also plays a role, with college graduates more than twice as likely to use AI
as those without a degree (58.7% vs. 22.9%). Similarly, full-time workers reported
higher usage rates than part-time workers, at 42.7% and 24.7%, respectively.
Global Perspective
For the first time since 1946, U.S. national debt has exceeded the size of the
economy. As of March 31, publicly held debt totaled approximately $31.3 trillion,
compared to $31.2 trillion in GDP over the prior 12 months, placing the debt-to
GDP ratio at 100.2%. Analysts expect the ratio to continue rising in the years
ahead. Currently, the federal government is spending about $1.33 for every $1.00
it collects in revenue.
Market Moving Events
Tuesday: Balance of Trade, JOLTS, New Home Sales, ISM Services
Wednesday: ADP Employment
Thursday: Jobless Claims, Productivity, Construction Spending
Friday: Employment Report, Consumer Sentiment
Commentary
All three major domestic equity indices continued their march higher last week. The Nasdaq and S&P 500 closed out April with their strongest monthly performances since 2020.1 The Nasdaq led the gains, rising 1.03%, followed by the S&P 500 at 0.91%, and the DJIA at 0.55%.2 Brent oil at one point last week touched $120/barrel.3 Volatility remains elevated in fixed income markets as investors assess the inflationary impact of the conflict in Iran. The 10-year Treasury yield reached its second-highest level of the year midweek at 4.415%, before easing slightly to close Friday at 4.38%.4
Federal Reserve policy remained at the forefront last week, as markets focused on the intersection of inflation and employment data. The Fed’s preferred inflation measure, the PCE Index, rose 0.7% in March and 3.5% year-over-year, with the core reading at 3.2%.5 Higher energy costs were a key driver, with spending on gasoline and related goods rising 20% during the month.6 On the labor front, initial jobless claims fell to 189,000 for the week ending April 25, the lowest level since 1969.7 Investors will receive additional clarity this Friday with the release of the April employment report which is expected to show the economy added a meager 53,000 jobs.8
The FOMC left rates unchanged last week at 3.50%–3.75%.9 Notably, four members dissented, one in favor of a rate cut, and three who wanted to remove the current easing bias in monetary policy.10 Chair Powell also indicated that he plans to remain on the Board for the foreseeable future.11
Chart of the Week
Following a weaker fourth quarter impacted by the government shutdown, the U.S. economy rebounded, growing at an annualized rate of 2.0% in the first quarter. Strong corporate investment in AI helped offset slightly soft consumer spending.
Source Materials
Market Moving Events:
MarketWatch.com
Chart of the Week:
Clearnomics,
Bureau of Economic Analysis, The Wall Street Journal
Statistic of the Week:
UNC Kenan-Flagler Business School
Global Perspective:
The Wall Street Journal
Commentary:
1. Barron’s
2. Bloomberg
3. MarketWatch.com
4. MarketWatch.com
5. The Wall Street Journal
6. The Wall Street Journal
7. Yahoo Finance
8. MarketWatch.com
9. The Federal Reserve
10. MarketWatch.com
11. The Wall Street Journal