🚨 EXTREME Market Update: How to invest now May 2026? (S&P 500 All Time High!)

In early April, the S&P 500 hit above 7,000 for its all-time high. At that point, I was asked, "Are you still going to dollar cost average into the S&P 500 right now at its literal all-time high?" And I replied, "Yes, of course I'm going to be dollar cost averaging. I dollar cost average into the S&P 500 rain or shine at all-time highs or if it's dropped a bunch. I actually do that with all of my three fund portfolio." Why do I dollar cost average? Because if I would have listened to my heart, I would have thought, uh, it's up really, really high. I'd rather buy it at a price that's a lot lower. It's going to be better at some point, so I'll just hold off and wait. Instead, I invest with my head. I'm trusting all of my studies and all of my research, and I know that we hit a new all-time high on average over 10 times per year in good years. Well, now it's only about a month later, and we just hit a very fresh new all-time high over 7,200. Now, this is the Saturday news roundup, and this week was a crazy week in the market, and you all saw it, especially with high-tech earnings, but there was a lot more that went on behind the scenes, and so I'm going to give you a really good idea of what happened. I'm also going to very quickly highlight each and every one of the best earnings reports, and it's not just the MAG7 companies. Then, I'm going to explain how I'm going to be investing, especially now during this very pivotal time. So, first, the Fed held the rates at the same place, but it did get a little bit messy. The Fed kept rates at 3.5 to 3.75% in an 84 split. Powell signals he's staying on as a board governor, while Kevin Worsh advanced through the Senate Banking Committee to become the next chair. Markets are now pricing essentially zero cuts for the rest of 2026. We may see a small cut by the end of 2026, but it's definitely pricing in as if we're not going to have any more cuts. Another big thing that's happening just kind of in the background and I'm worried that a lot of people are forgetting about this is just what's going on in Iran. But then again, we had a pretty stellar GDP reading. Trump had rejected Iran's offer to open up the straight of Hermuz. And they prepared for an extended blockade which brought oil prices up even higher. Specifically, gas in California is up over $6. And for me with my diesel truck, it's up over $8. And it's insane. I'm ready for them to figure out that situation as soon as possible, but I'm fearing that we are not anywhere near where we should be. And that's one of the things I want to warn everyone about. Everyone's thinking that we're past it and now everything's going to all-time highs and it's just going to continue to go alltime highs. Got to be careful and understand and not FOMO in just because the market's going up. So, please be careful. Please do your due diligence. But one good thing to point out is the actual numbers that we just saw. Thursday's Q1 GDP print came in at 2% which is up from 0.5% in Q4 on the back of AIdriven business investment. This is pretty much what brought the S&P 500 up over 7200. And this is what's actually making the stock market go up so high. A third big thing that happened that maybe not a lot of you heard about is this whole idea with Open AI. They missed revenue and they had some pretty interesting comments come out from somebody who works in the company very high up and so it's putting AI just on shaky ground. OpenAI is missing its own internal revenue and user growth targets with CFO Sarah Frier warning leadership it may struggle to pay future compute contracts. This is the bare case for $725 billion in 2026 hyperscaler capex. This also explains why Meta and Microsoft got punished for increasing their capex while Alphabet got rewarded because Alphabet isn't just going after the AI. It has an extensive backlog. These three stories define the market outlook right now. A hawkishleaning Fed that won't cut, an oil shock you can't ignore, and growing nervousness about whether the AI capex super cycle has a viable end customer. Yet, the S&P 500 hit fresh all-time highs anyway, closing above 7,200 for the first time Thursday. That tells you the market's choosing to trust the earnings story over the macro risks. That's a powerful setup if it holds, and a violently fragile one, if any one of these three stories takes a turn for the worse. Let's move on to some of the biggest earnings reports in history. And then I'm going to give you a good idea of what's going on in the market and where we're going to go. First is Alphabet or Google. They beat on revenue and earnings per share by a lot. Google Cloud topped $20 billion for the first time, growing 63% year-over-year. Search revenue accelerated to 19% growth, pushing back on the AI disruption bare case. Alphabet raised 2026 capex to 180 to 190 billion and told investors 2027 capex the cloud beat was strong enough that shares rose more than 5%. and eventually way higher than that, suggesting the market's willing to fund the spending as long as cloud growth keeps accelerating. Next was Microsoft. Microsoft revenue grew 18% year-over-year. Their earnings per share was way higher than expected and Azour grew 40%. AI business surpassed a $ 37 billion annual run rate, which is up 123% year-over-year. And capex is definitely soaring. All in all, the print was strong, but capex pressure on margins, gross margin at the narrowest since 2022 is the swing factor for whether the stock can grind higher near term. Next was Meta. Meta beat on revenue, up 33% year-over-year. The earnings per share was up a bunch. Ad impressions were up 19%. All in all, we're looking towards a very high revenue, but also capex was raised up about $145 billion. The stock fell as much as 10%. And this is the cleanest example of the market punishing AI capex without a clear monetization payoff. And near-term sentiment will hinge on whether ad revenue growth justifies the spend. Next was Amazon, and I was really looking forward to this one. Amazon blew revenue out of the water, also earnings per share out of the water. AWS revenue is up 28% year-over-year, which is the fastest growth in more than three years. Operating margin hit the highest ever at 13.1%. Amazon was definitely the cleanest beat of the four hyperscalers and is set up best near-term among the group. Then we had Apple, the revenue beat, the earnings per share beat. The revenue really climbed 17% year-over-year, but the iPhone revenue missed estimates. The bigger near-term variable is the upcoming Tim Cuck to John Turnis CEO transition. We'll also see what happens on the AI roadmap. All in all, the dominant story of the week was capex. Going into the quarter, the high end of estimates put the hyperscaler group's AI spending at closer to $725 billion. Markets are now sorting hyperscalers into two buckets. those whose cloud revenue is accelerating fast enough to justify the spend which would be Alphabet and Amazon versus those where the spend is racing ahead of monetization currently Meta and to a lesser extent Microsoft. But more than just the MAG7 type stocks, there was three other main stocks that did report earnings throughout this month that I do want to highlight real quick because that gives us a better picture of the entire market. So first was JP Morgan. It had a big earning per share beat and the revenue beat and net income increase. Jaimeie Diamond noted the US economy remained resilient in the quarter with consumers still earning and spending and businesses still healthy supported by AIdriven capital investment and Fed asset purchases. This was a very strong investment banking slashtrading print and that's what investors should focus on since it confirms that capital markets activity is genuinely picking up bullish for the financial sector and a signal that animal spirits are back. Next most important was Caterpillar. This is a very solid thing to look at because it's a great non- tech read just trying to see what's going on with AI but not specifically in tech. had a big earning per share beat, huge revenue beat, and year-over-year earning per share increase. The construction segment revenue jumped 38% and power and energy segment is up 22%. Both helped by strong North American demand. CAT's power and energy segment has seen brisk sales as electricity hungry data centers spend heavily on power generation and backup equipment to extend AI's reach. The last one's very important because we do need to understand what's going on with consumer sentiment, specifically with streaming and spending. And this would be Netflix. They had a big revenue beat and net income beat. Earnings were boosted by a $2.8 billion termination fee that Netflix received after Paramount outbid them for Warner Brothers. Strip out the one-time fee and operating income rose 18% with margin holding at 32%. So, what's the big picture across all three of these? JP Morgan says the consumer and capital markets are healthy. Caterpillar says the AI infrastructure boom is real and spreading beyond tech. Netflix says consumer subscriptions and ad spend are still growing. Combine that with the Mag 7 prints that were pretty much all good. They were almost all beats. The only problem with most of them was just how much they're going to be spending. But it's all spending on AI infrastructure. We'll see how that pays off. But I do think that's going to pay off. So, this is why the S&P 500 hit above 7,200 for the first time. Now, we do have to remember that there still are things that are in the background that absolutely could wake up as soon as we're out of this ceasefire. It's not like the war is just going away unless we have some type of crazy negotiation that's happening right now. And I just really don't think that's going to be the case. So, just brace yourselves for some impact because there can be a lot of headwinds coming our way, especially if oil prices remain high. the conflict keeps going on, there could be a lot of issues coming up. I will tell you that right now I'm cautiously optimistic. It is good to see actual numbers and see companies actually profiting more than just off of hype of this demand of what could happen with AI. It is also good to see the GDP numbers up super high, but again, those are definitely pushed up because of all the data center and AI increase coming in. No matter what's going on in this market, whether we continue to go up or we see something happen with the conflict in the Middle East and the stock market drops, I'm going to be continuing to dollarcost average, specifically going very heavy into the broad basic ETFs that I always talk about on this channel. Buying into individual stocks right now is going to be a quite a bumpy ride, but if they do drop far enough, I'll definitely take part in some of them, specifically Microsoft and Amazon. And then a lot of the other energy companies. And then also, I've been really looking at some quantum computing stocks. And if you'd like me to make a video on some quantum computing stocks, go ahead and write that down in the comment section down below, and I'd love to make that video for you. But my own research is showing that there's some pretty cool stuff coming. Here's a video of what to invest in as far as those broad ETFs within specifically a taxable brokerage. And here's a video specifically within a Roth IRA. Very much stick to those broad solid ETFs for right now. and let's weather this storm. Make it through to 2027 and then I think big things are coming.