Powell's Exit. The Data Hit.
The Rally Held.

The week began with seven central bank decisions on the docket and ended with the S&P 500 printing a record close. In between: a Fed mutiny, an inflation shock embedded in a GDP miss, four Magnificent 7 earnings prints that split cleanly between monetizers and spenders, and oil pulling back from the edge. The market absorbed all of it. The question heading into May is whether it absorbed it correctly.

The Fed Fractures on Powell's Way Out

Wednesday's FOMC decision was the week's defining moment — and not because of the outcome. The committee held rates at 3.50–3.75%, as every futures market in the world predicted. What nobody had fully priced was the vote: 8-4, the most divided Fed decision in years. Three of the four dissenters weren't pushing for a cut. They wanted the easing bias removed from the statement entirely, signaling that they have no intention of handing Kevin Warsh a dovish runway when he takes the chair. The fourth dissenter pushed in the opposite direction.

Powell's final press conference was composed, deliberate, and revealing in what it didn't say. He declined to use the word "stagflation" — a word he's been careful to sidestep for months. He acknowledged the Middle East conflict as contributing to "a high level of uncertainty about the economic outlook" and said the committee would remain "attentive to risks to both sides of our dual mandate." Translation: they're not cutting, they're not hiking, and they're waiting for the data to force their hand. Warsh advanced out of the Senate Banking Committee that same morning. Powell congratulated him from the podium. The era ended in the room where it started.

The GDP-PCE Double Header

Thursday morning dropped four data points simultaneously at 8:30 AM ET — Q1 GDP advance, March PCE, Core PCE, and the Employment Cost Index. Markets had framed it for weeks as the macro event of the half-year. It lived up to the billing.

Release	Actual	Consensus	Prior	Read
Q1 GDP (QoQ Ann.)	2.0%	2.3%	0.5%	Miss
PCE (QoQ Ann.)	4.5%	—	2.9%	Shock
Core PCE (QoQ Ann.)	4.3%	—	2.7%	Shock
PCE (YoY, March)	3.5%	3.5%	2.8%	In-line
Core PCE (YoY, March)	3.2%	3.2%	3.0%	In-line
Core PCE (MoM, March)	+0.3%	0.3%	0.4%	Slight ease

The 2.0% GDP print is a genuine rebound from Q4's near-stall at 0.5% — but that low bar matters. Much of Q4's weakness was attributable to a 43-day federal government shutdown that cut federal payrolls and spending. Q1's bounce partly reflects that drag reversing, not a fresh acceleration in organic growth. Real final sales to private domestic purchasers — the cleanest gauge of underlying demand — grew 2.5%, up from 1.8% in Q4. That number is better than the headline.

The inflation story is harder to dismiss. Quarterly PCE at 4.5% is more than double the Fed's target and represents the sharpest quarterly acceleration in the price index in years. The headline-core gap — 4.5% PCE versus 4.3% core — tells you most of this came from energy. That matters for how you read it: the Strait of Hormuz closure drove a gasoline surge that registered as a $81.3 billion monthly increase in energy goods consumption in March alone, more than three times the next-largest spending category. If and when the Strait fully reopens, that impulse reverses. The question is how much the broader price level has been reprimed in the meantime.

Earnings Split the Tape

Four of the seven most valuable companies on Earth reported Wednesday night, the same evening as the FOMC decision. The outcomes could not have been more divergent.

Company	Key Beat/Miss	Reaction
MON APR 28	Earnings season ramps; seven central banks on deck
WED APR 29	FOMC holds 8-4 at 3.50–3.75% · Powell's final presser · Warsh clears Senate Banking Committee	SPX –0.2% into close on hawkish dissent read
WED AFTER	GOOGL EPS $5.11 vs $2.63 est · Cloud +63% · Backlog nearly doubled to $460B  |  AMZN AWS +28%, fastest in 15 qtrs  |  META Capex guide $125–$145B · Reality Labs –$4B  |  MSFT Soft revenue guide despite EPS beat	Mixed pre-market; GOOGL +9%, AMZN +3%, META –8%, MSFT –4%
THU APR 30	GDP 2.0% (miss 2.3%) · PCE QoQ 4.5% · Core PCE YoY 3.2% (in-line) · ECI · Jobless claims resilient  |  AAPL beats; iPhone services solid, China commentary cautious	SPX +1.0% record close · All 11 sectors green · CAT +10%, LLY +9%
FRI MAY 1	ISM Manufacturing 10 AM · European markets closed (May Day) · WTI ~$100, holding pullback	Thin liquidity; S&P futures fractionally higher into open

The Alphabet print was the week's most significant single data point. EPS of $5.11 versus $2.63 expected is not a beat — it's a different planet. Google Cloud revenue up 63% with backlog nearly doubling to $460 billion signals that enterprise AI spending is hitting Google's infrastructure at a velocity that's outrunning even the most bullish models. Amazon's AWS print — 28% growth, the fastest in 15 quarters — confirmed the signal from the other side. When the two cloud hyperscalers accelerate simultaneously, the AI capex narrative has a real revenue foundation under it.

Meta and Microsoft told a different story. Meta's decision to raise its 2026 capital expenditure guidance to $125–$145 billion — with a $4 billion Reality Labs operating loss sitting alongside it — spooked investors who are still waiting for the monetization math to close. Microsoft's guidance softness was more modest, but the stock's reaction reflected a market that has priced in perfection for every name in the complex. The AI trade is bifurcating between companies that are being paid for AI now and companies that are building toward a future payoff on borrowed confidence.

Oil Pulls Back. The Risk Premium Cools.

WTI crude — which touched $114.58 at its April peak and sent Brent briefly above $130 — has pulled back to around $100 this week. The move is meaningful but not yet definitive. The Strait of Hormuz remains effectively closed; around 20% of global oil supply is still being rerouted or held. The pullback reflects a fading of the fear premium as markets adjusted to the new supply regime, not a resolution of the underlying constraint.

The broader macro implication is significant. Every $10 move in WTI maps to roughly 0.4 percentage points on inflation and negative 0.15 percentage points on GDP. A sustained move from $114 back toward $90 would take meaningful pressure off the PCE trajectory heading into Q2, giving Powell's successor more room to maneuver than the current data suggest. That is a big if. Iran-linked headlines have moved oil $8 in a session this quarter. Any fresh escalation resets the clock.