JBizNews Desk | May 7, 2026
Wall Street opened Thursday at fresh all-time highs as a convergence of forces pushed markets higher: diplomatic momentum toward a U.S.-Iran peace deal sent oil prices tumbling to their lowest levels since the war began in February, a wave of corporate earnings beat expectations across food, tech, and cybersecurity, global markets from Tokyo to London surged in sympathy, a bipartisan U.S. Senate delegation arrived in Beijing calling for de-escalation with China, and billionaire hedge fund manager Paul Tudor Jones told CNBC Thursday morning that the AI-driven bull market still has “another year or two to run” — a statement that gave fresh confidence to investors already riding a historic rally.
The S&P 500 opened at 7,372, the Nasdaq at 25,957, and both indexes extended Wednesday’s record closes, while cheaper oil — down more than 4% on the session — offered the clearest signal yet that relief at the gas pump may finally be within reach for millions of American households.
Iran Talks and Oil Markets Drive the Rally
The geopolitical backdrop was the dominant force. The United States and Iran are working through Pakistani mediators on a one-page, 14-point memorandum of understanding to formally end hostilities and establish a structure for nuclear negotiations. Talks are expected to resume next week in Islamabad. President Donald Trump said he has held “very good talks” with Iran and called a deal “very possible,” though he has also warned that Iran will be bombed “at a much higher level” if negotiations fail.
Iran confirmed it is reviewing the U.S. proposal and was expected to deliver a formal response to mediators Thursday. The ceasefire, in place since April 7, has remained fragile — earlier this week Iran attacked U.S.-escorted commercial vessels in the Strait of Hormuz — but markets chose to focus on the diplomatic track instead of the military risk.
The impact on consumers could be immediate if tensions continue easing. The national average for gasoline reached $4.54 per gallon this week, sharply above pre-war levels, and a reopening of stable shipping lanes through the Strait of Hormuz would directly reduce fuel costs for drivers, airlines, trucking companies, delivery services, manufacturers, and small businesses already squeezed by months of elevated energy prices.
Global Markets Surge Alongside Wall Street
Global markets rallied alongside Wall Street.
Japan’s Nikkei 225 surged more than 5% Thursday, crossing 62,000 for the first time ever, led by SoftBank, which jumped more than 18%, while semiconductor-related companies Sumco Corp. and Ibiden each soared roughly 20% on continued optimism tied to AI infrastructure demand.
European markets extended Wednesday’s strong gains, with London, Paris, and Frankfurt each climbing more than 2% amid improving investor sentiment tied to both geopolitics and global growth expectations.
Meanwhile, a bipartisan U.S. Senate delegation led by Senator Steve Daines arrived in Beijing Thursday calling for stability and peaceful cooperation with China ahead of a high-level meeting between the two countries’ leaders next week — another sign that Washington is attempting to stabilize multiple geopolitical fronts simultaneously.
Paul Tudor Jones Extends AI Optimism
On Wall Street, investors also received another dose of AI-fueled optimism from billionaire hedge fund manager Paul Tudor Jones, founder of Tudor Investment Corporation, who said Thursday on CNBC’s Squawk Box that the current AI boom resembles the commercialization phase of the internet during the mid-1990s.
Jones compared the current environment to roughly 1999 — about a year before the peak of the dot-com rally — and said the market could continue climbing significantly higher before a major correction eventually arrives. He added that he recently increased his exposure to AI-related investments, though he cautioned that whenever the cycle ultimately turns, the selloff could be severe.
Corporate Earnings Fuel Momentum
Corporate earnings also helped drive Thursday’s rally.
McDonald’s reported adjusted first-quarter earnings per share of $2.83, beating analyst expectations of $2.74, on revenue of $6.52 billion. Executives said the company’s value-focused menu strategy continues resonating with inflation-weary consumers seeking lower-cost dining options. Shares rose more than 3% following the report.
DoorDash surged roughly 10% after posting quarterly earnings of $0.42 per share, ahead of the $0.36 analysts expected. Gross order value climbed 37% year-over-year to $31.6 billion, also topping estimates, while second-quarter guidance came in above Wall Street forecasts.
The company disclosed that it absorbed more than $50 million in fuel-related relief costs for drivers during the quarter as gasoline prices surged during the Iran conflict. Executives said they plan to offset some of those costs through internal operational adjustments and technology investments.
Cybersecurity company Fortinet became the S&P 500’s top performer at the open, surging between 15% and 19% after beating first-quarter earnings expectations and raising full-year billings guidance, signaling continued strong enterprise demand for cybersecurity infrastructure amid the AI expansion.
Palantir Technologies added nearly 3%, extending gains following its own strong earnings report earlier this week, while AppLovin climbed 3.7% after beating revenue and earnings estimates despite enduring a difficult first quarter marked by regulatory scrutiny and aggressive short-seller attacks that had cut the stock nearly in half earlier this year.
Some Earnings Reports Fail to Impress
Not every earnings report impressed investors.
Arm Holdings fell more than 7% despite topping expectations after executives disclosed supply limitations that could prevent the company from meeting an additional $1 billion in demand tied to its next-generation AGI-focused processors. Investors appeared more concerned about production bottlenecks than the company’s strong earnings beat.
Shake Shack tumbled nearly 19% after missing first-quarter expectations, while Whirlpool also declined following weaker-than-expected results that highlighted ongoing pressure on consumer spending for big-ticket household purchases.
Energy giant Shell slipped despite posting strong quarterly earnings, as declining oil prices and lower production levels weighed on investor sentiment toward the broader energy sector.
Analysts Raise Targets Across Key Stocks
Analysts were also active Thursday morning.
Stifel raised its price target on Starbucks to $117 from $115, maintaining a Buy rating after the company announced a new China joint venture with Boyu Capital tied to the sale of a 60% stake in its China retail operations.
RBC Capital analyst Tom Narayan raised his price target on Ford Motor to $13 from $11, while Piper Sandler analyst Derek Podhaizer increased his target on Nabors Industries to $120 from $84, both maintaining bullish ratings.
Economic Data Offers Reassurance
Economic data released Thursday offered additional reassurance that the U.S. economy remains relatively stable despite geopolitical tensions and elevated energy costs.
Weekly jobless claims totaled 200,000 for the week ended May 2 — above the prior week but below the 206,000 consensus estimate — while continuing claims fell to 1.77 million. First-quarter productivity rose 0.8%, below expectations, while unit labor costs increased 2.3%.
Investors are now looking ahead to Friday’s closely watched nonfarm payrolls report for a clearer picture of how the labor market and broader economy are handling the combined pressures of war-related inflation, elevated fuel prices, and rapid AI-driven economic transformation.
For now, however, markets appear focused on one message above all else: easing geopolitical tensions, falling oil prices, resilient corporate earnings, and relentless AI optimism continue fueling one of the strongest rallies Wall Street has seen in years.
— JBizNews Desk
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