Week Ending May 8, 2026
April Market & Economic Summary
If you did not read the email last week, here’s your chance. In short — earnings growth has accelerated to 24.8% on a forward basis, the U.S. economy is tracking 3.7% real GDP growth for Q2, the labor market remains firm, and energy now consumes a far smaller share of household budgets than in prior cycles. The report also includes historical data on forward returns from all-time highs that I think provides useful context for the months ahead.
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The SEC and CFTC’s latest crypto guidance
The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) issued a joint interpretation clarifying how federal securities laws apply to certain crypto assets and crypto transactions. After more than a decade of regulatory ambiguity regarding digital assets, the guidance delivered a major step toward what the crypto industry has long awaited: a clear framework defining how specific digital assets are treated by federal law.
Let’s explore some of the specifics of this pivotal guidance, and what it might mean for investors.
What does the SEC and CFTC’s latest guidance for digital assets say?
The guidance separates digital assets into 5 distinct categories based on their characteristics, uses, and functions—4 of which are not treated as securities.
Below is a summary for each category.
- Digital commodities. A crypto asset that’s linked to and derives value from the operation of a crypto system, rather than the expectation of profits. The guidance specifically mentions bitcoin (BTC), ethereum (ETH), Solana (SOL), and 15 other cryptocurrencies. Digital commodities are not treated as securities.
- Digital collectibles. Crypto assets that are designed to be collected, and may represent or convey rights to artwork, music, videos, trading cards, in-game items, memes, characters, or cultural content. NFTs and memecoins may fall under this category. Digital collectibles are not treated as securities.
- Digital tools. Crypto assets that perform a practical function, like representing proof of a membership, ticket, credential, and other similar use cases. Digital tools are not treated as securities.
- Stablecoins. Crypto assets designed to maintain a stable value equivalent to its pegged asset. Payment stablecoins under the GENIUS Act are not securities.
- Digital securities. Digital assets issued as investment contracts with promises of future profits. Includes tokenized securities (i.e., traditional financial instruments that are traded on a blockchain, including tokenized stocks and bonds). Unsurprisingly, digital securities are treated as securities.
The guidance establishes how a legal standard called the Howey Test—which defines whether a transaction qualifies as an investment contract, and therefore a security—applies to digital assets. It makes clear that a digital asset can start out as a security and “graduate” from that status if there is no longer a reliance on the efforts of the issuer to derive value for the asset. In other words, securities status is not permanent, which has widespread implications for many aspects of crypto, and especially for DeFi.
In addition to the categories above, the guidance also clarifies that the following crypto activities are not securities transactions, and thus lie outside of the SEC’s jurisdiction:
What investors might want to consider
First, it should be noted that this guidance is not a new law, but rather a statement of how the commissions interpret existing law. It is binding on the SEC and CFTC staff in that they must administer the law consistently with this interpretation, and that it carries persuasive weight in any enforcement or litigation context. Additional rule change proposals, as well as the CLARITY Act (currently being debated in the Senate), could turn the details from this guidance into law. But it remains to be seen whether they are passed.
As such, investors should not buy crypto expecting that future values will go up based on this release alone. And in general, this also applies to guidelines that do make it into law. While the crypto industry has certainly welcomed this guidance, it does not necessarily mean prices will climb higher over any given time horizon. Remember that if the market has been anticipating favorable legislation, bullish momentum has often already been factored into the current price.
Nevertheless, the crypto industry has nearly uniformly embraced the guidance, seen as a validation of years of advocacy. Perhaps the most significant implication is that it may open the door for more institutional investors to buy crypto, as they face fewer restrictions for holding commodities-classified digital assets compared to holding securities-classified digital assets.
Ultimately, remember that crypto can be volatile, and managing your holdings requires understanding of crypto cybersecurity. In general, crypto may be more susceptible to market manipulation than securities, and direct investments in crypto do not benefit from the same regulatory protections applicable to registered securities. Also, the future regulatory environment for crypto is currently uncertain.
In light of this, if you’ve decided crypto is right for your portfolio, you should only buy crypto with an amount you can afford to lose.
SOURCE: Fidelity
Equities
- U.S. equity markets rose for the sixth consecutive week as stronger-than-expected corporate earnings and hopes of a peace deal kept investors in a jovial mood.
- The S&P 500 ended the week up 2.4%, while the Nasdaq finished up 4.5%.
- As we enter the final innings of earnings season, earnings continue to improve, with first-quarter earnings now expected to rise 27.7% — the strongest growth rate since the fourth quarter of 2021.
- Large-cap growth stocks resumed their leadership role, outperforming their value counterparts by a wide margin for the fifth of the past six weeks.
- Information technology surged over 7% last week, led by semiconductor companies, as another wave of AI enthusiasm and strong earnings growth lifted the sector higher.
- The energy sector hit the bottom of the S&P 500 leaderboard, sliding 5.3% on the back of declining oil prices.
- Utilities and financials followed suit as investors shifted capital away from defensive areas and into high-beta tech and growth stocks.
- International markets were up last week, led by Emerging Markets, which returned nearly 7%, driven by strength out of South Korea and Taiwan stocks.
Bonds
- Yields remained roughly in line with where they finished the prior week, trading in tandem with oil prices as the market repriced inflation expectations.
- The 10-year Treasury yield finished the week a basis point lower at 4.38%, while the 2-year Treasury yield rose slightly to 3.90%, resulting in a 2–10 spread of 48 basis points.
- The Bloomberg US Aggregate Index rose 0.26% for the week, while high-yield bonds gained 0.05%.
- Performance was positive across the quality and duration spectrum, especially on the longer end of the curve.
- Long-term corporate bonds were the best-performing segment, returning 0.69%.
- Investment-grade and high-yield corporate yields ended the week at 5.10% and 7.26%, respectively.
Macroeconomic Data
- U.S. economic data for the week was light and did its best to draw little attention away from the surging AI optimism.
- U.S. factory orders in March rose 1.5%, well ahead of estimates and last month’s 0.3% gain, as new orders for goods rose for the fourth month out of the last five.
- The April ISM services index fell to 53.6 from 54.0, a slight dip as businesses still grew amid a more cautious backdrop.
- The ADP employment report showed the U.S. created 109,000 new jobs in April, well ahead of estimates and marking the biggest increase in 15 months.
- Nonfarm payrolls added 115,000 new jobs in April, topping consensus estimates and capping the strongest two-month period for nonfarm payroll increases since 2024.
- The unemployment rate remained at 4.3%; however, average hourly earnings growth was weaker than expected, the labor force participation rate dipped, and the U-6 unemployment rate (which accounts for unemployed and underemployed workers) increased.
- The University of Michigan’s preliminary consumer sentiment index fell to 48.2 in May — its lowest reading on record — as higher gasoline prices and tariffs weighed on responses.
(as of Monday’s Market Opening)
| Total Return (1D) | Total Return (1W) | Total Return (MTD) | Total Return (QTD) | Total Return (YTD) | |
| S&P 500 | 0.15% | 2.91% | 2.79% | 13.51% | 8.25% |
| Dow Jones Industrial Average | -0.08% | 1.28% | -0.17% | 6.97% | 3.14% |
| NASDAQ | 0.03% | 4.74% | 5.48% | 21.61% | 12.97% |
| NASDAQ 100 | -0.12% | 5.60% | 6.37% | 23.00% | 15.65% |
| Russell 1000 | 0.15% | 2.30% | 2.57% | 13.01% | 8.15% |
| Russell 2000 | 0.66% | 2.42% | 2.90% | 15.34% | 16.40% |
| Russell 3000 | 0.15% | 2.34% | 2.63% | 13.02% | 8.51% |
| ACWI | 0.06% | 2.52% | 2.60% | 12.37% | 9.89% |
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- Cestia Wealth Management is not a legal tax professional. We offer tax gap analysis for clients who desire to have a comprehensive financial plan, which requires in-depth tax strategy and planning as a distinct part of the overall customized solution. Please consult your tax professional on all matters addressed in this report.
- Information about annuities are not to be considered a recommendation. The information provided should not considered a recommendation to purchase or sell any particular security.
- Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.
