The week that ended May 2 was, at its core, a week of institutional transitions. Greg Abel stood on the Omaha stage for the first time as Berkshire Hathaway’s CEO — Warren Buffett in the first row, jersey #60 retired to the rafters, $397.4 billion in cash on the balance sheet and a market waiting to see if the Oracle’s successor would deploy it or hold it. Kevin Warsh’s floor vote is expected the week of May 11; his first FOMC meeting is June 16-17. The handoff is a June story. This week’s macro events: ISM Services (Tue May 5), Japan reopens (Wed May 6), ADP (Wed May 6), NFP (Fri May 8). And Iran is negotiating — slowly, ambiguously, through Pakistani mediators — while the US naval blockade holds at Day 15 and Hormuz remains effectively closed. Three institutions, three successor figures, three unresolved situations. The market is pricing through all of them simultaneously.
The week’s market story was clear in structure if not in logic. The S&P 500 gained for a sixth consecutive week — the longest streak since October 2024. The Nasdaq closed above 25,000 for the first time in history. Apple’s Q3 guidance of +14-17% crushed the 9.5% consensus and carried the entire Nasdaq complex. Exxon and Chevron became the 7th and 8th companies to name Operation Epic Fury in their earnings calls, while confirming that $102-107 WTI is generating the most favorable oil company margins since 2022. Seagate added 7.91% on a memory supercycle confirmation. Japan intervened in USD/JPY overnight Thursday into Friday, surging the yen from 160.72 to 155.5 and erasing all war-era yen losses in a single move. WTI (West Texas Intermediate, the US oil benchmark) spiked to $106 intraday Friday before closing at $102.50 on the Iranian diplomatic signal.
The week ahead is dense with scheduled risk. Warsh’s floor vote is expected the week of May 11; his first FOMC is June 16-17. This week: ISM Services + JOLTS (Tue May 5), Japan reopens (Wed May 6), ADP (Wed), NFP (Fri May 8 — first full-blockade jobs report). The Iran Pakistan channel could produce a result or collapse again. The Berkshire Abel era begins in earnest Monday, with the market digesting the first post-Buffett annual meeting and its $397.4 billion question.
Berkshire Hathaway reported Q1 2026 operating earnings of $11.35 billion, up 18% year-over-year, in its first quarterly results under CEO Greg Abel. Net income more than doubled to $10.1 billion from $4.6 billion in Q1 2025, aided by significantly reduced investment losses. The cash pile reached a record $397.4 billion, up from $373 billion at year-end 2025. Abel’s first annual meeting as CEO on Saturday drew somewhat smaller crowds than the Buffett era — the folksy wisdom replaced by detailed business discussions — but the substance was significant: a $397.4 billion capital deployment question, a buyback program restarted in March after nearly a year’s pause, and an AI posture that is deliberately measured rather than trend-driven.
Abel named what he called the “core four” equity positions — Apple, American Express, Moody’s, and Coca-Cola — as the foundation of Berkshire’s portfolio. The Apple investment, which began at a $35 billion stake under Buffett, has grown to $185 billion in value including dividends. Tim Cook attended the meeting and received longer applause than Buffett when introduced — a measure of how central the Apple bet has been to Berkshire’s decade of performance. Abel also highlighted Berkshire’s positions in Bank of America, Chevron, and Alphabet — the latter a $4 billion purchase in Q3 2025. He indicated he would “actively manage” the portfolio by adding to or trimming positions, collaborating with Buffett throughout.
On AI, Abel was characteristically deliberate: “We are not going to do AI for the sake of AI. At this point in time, we’re using it to solve logical problems in our businesses.” BNSF, Berkshire’s railroad unit (which contributed $1.38 billion in Q1, up 13%), has begun integrating AI tools to improve operations. Insurance underwriting earnings rose 28% to $1.7 billion. Abel acknowledged the insurance sector is “softening” and “more challenging” as more capital flows in, making it harder to charge sufficient premiums. BNSF still lags peer railroads — Abel acknowledged improvement is needed. Buffett, seated in the first row in a purple sweater, said Abel “is doing everything I did and then some, and he’s doing it better in all cases.” The transition is real. The question is what Abel does with $397.4 billion in a war economy where every asset class carries a premium.
Monday opened with the S&P 500 near 7,200 and a macro data week arriving. Tuesday’s Q1 GDP of +2.0% annualized demolished the war-era consensus of 0.8-1.2% and confirmed the economy survived the blockade’s opening month. The same report delivered core PCE of +4.3% quarterly — the hottest in over a year. Stagflation is now official, confirmed in BEA data, not just in market pricing. The FOMC met and voted 8-4 with three dissenters opposing any easing bias — the most hawkish Fed split since 2019. Jerome Powell’s final press conference as chair cited the Middle East in the Fed statement for the first time ever.
Wednesday night Apple delivered its best March quarter ever: revenue $111.2 billion (+17%), EPS $2.01 (+22%), Services all-time high $30.98 billion, and June quarter guidance of +14-17% that crushed the 9.5% consensus. AAPL+5% after hours set the tone for Thursday and Friday. The Nasdaq closed above 25,000 on Friday for the first time. Meanwhile Seagate Technology gained 7.91% Friday confirming a memory supercycle in two consecutive sessions alongside Thursday’s SanDisk 78% gross margin print. Both moves trace directly to the same AI infrastructure demand that caused Apple to warn of “significantly higher memory costs” in Q3.
Japan intervened overnight Thursday. USD/JPY surged ~3% from 160.72 to 155.5 during Golden Week thin liquidity — the first FX intervention in nearly two years, erasing all war-era yen losses in a single move. Friday brought Exxon and Chevron earnings: both beat, both named Operation Epic Fury (7th and 8th war disclosers), and both face Q2 and full-year profit trajectories that are the most favorable since 2022. Spirit Aviation announced plans to cease operations — the war era’s first major airline casualty, citing fuel costs up 47% since the war began. And this morning, Greg Abel stood at the Berkshire podium for the first time as CEO, Buffett in the first row, $397.4 billion in cash on the books.
The diplomatic picture entering next week is unchanged in structure and unchanged in uncertainty. Iran sent a formal response through Pakistani mediators to the latest US amendments to a draft peace agreement. The substance of that response has not been publicly disclosed — not by Tehran, not by Islamabad, and deliberately not by Washington. Trump’s statement that “no one knows the status of talks aside from myself and a handful of others” reflects both his negotiating posture and the genuine opacity of the Pakistan channel at this stage. The blockade remains in force. Hormuz remains effectively closed. Day 15.
What could change next week: the Iranian response may produce a counter-offer from the US that narrows the gap between Tehran’s demand (lift the blockade first, then negotiate nuclear terms) and Washington’s demand (nuclear framework first, blockade as leverage until agreement). The FOMC on May 6-7 will not address the war directly, but its language on energy prices and inflation will signal whether the Fed views the blockade as a temporary supply shock or a structural inflation driver. A hawkish statement from Warsh’s first meeting would compound the stagflation read. The US has also threatened sanctions on Chinese refiners buying Iranian oil — if implemented, this escalates the economic pressure on Tehran and narrows the diplomatic window simultaneously.
Iran’s response through Pakistan finds enough common ground with the US amendments to schedule a formal Round 3 negotiation session. The blockade remains in place as leverage but both sides signal intent to negotiate a phased nuclear-for-reopening sequence. WTI falls toward $92-95 on the de-escalation signal. Nasdaq and S&P rally 1.5-2%+. USD/JPY strengthens past 155 as yen carry partially unwinds. The Goldman Hormuz-by-June thesis becomes the baseline. Low probability but highest market impact.
Iran’s response is acknowledged by Washington but does not narrow the fundamental gap: Tehran wants the blockade lifted as a precondition; Washington refuses. The Pakistan channel stays open — neither side wants the diplomatic optics of a formal breakdown. WTI holds $100-106, oscillating on every diplomatic signal. Markets grind sideways to modestly higher on strong earnings momentum. FOMC and NFP dominate the week narrative. Hormuz remains closed entering May 9. This is the most probable outcome.
Iran publicly states the Pakistani channel has been exhausted and that US preconditions make negotiation impossible under current conditions. Hormuz threats resurface. WTI spikes toward $115-120. US-China tensions escalate if sanctions on Chinese refiners are announced simultaneously. Nasdaq sells off 2-3%+. VIX spikes from 16 toward 22-25. Gold surges. The Citi $150 Brent tail risk enters mainstream pricing. This scenario requires an Iranian domestic political trigger or a US escalatory move (sanctions on Chinese refiners) that breaks the Pakistani channel. Lower probability but non-trivial given the fundamental gap in positions.