U.S. financial markets finished the week ending May 22, 2026, on a positive note, with major indexes rebounding from early-week losses to log solid gains. The S&P 500 rose 0.88%, putting it on track for an eighth consecutive weekly winning streak, while the Nasdaq Composite gained 0.45%. Small-cap and mid-cap equities outperformed, with the Russell 2000 climbing 2.7%.
Market sentiment was heavily steered by fluctuating crude oil prices and shifting geopolitical dynamics surrounding the Iran conflict. Equities caught a late-week boost after reported progress in Washington-Iran peace talks, which helped ease energy supply disruptions. Consequently, West Texas Intermediate (WTI) crude oil futures slid roughly 8% to settle near $96 per barrel.
· The Federal Reserve Released the Minutes from their Most Recent Meeting, April 28-29, and signaled the potential for a rate hike should inflation remain elevated. The Fed noted that “a majority of participants highlighted, however, that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent.” Further along the minutes noted that “risks to the inflation projection were seen as skewed to the upside: With inflation having run significantly above 2 percent over the past five years, with further increases in inflation likely to occur as a result of the conflict in the Middle East, and with emergent price pressures in a few categories that appeared unrelated to tariffs or energy prices, the staff viewed the possibility that inflation would be more persistent than anticipated as a salient risk.” Ironically, we noted within this same missive last week that “it will be difficult for newly appointed Fed Chair, Kevin Warsh, to cut rates. In fact, there is a greater likelihood that the next move by the Fed will be to raise rates rather than cut. If oil remains at or near these levels, that would be our expectation as well.”
· Nvidia (NVDA), the company at the epicenter of the Artificial Intelligence (AI) Revolution, posted Q1 Fiscal 2026 earnings Wednesday evening. They were nothing short of outstanding. The company announced earnings of $1.87 per share on revenue of $81.76 billion versus a consensus estimate of $1.76 per share and $78.86 billion. Revenue at Nvidia rose 85% from year ago levels. In fact, Nvidia has had year-over-year revenue growth of at least 50% for each of the prior twelve quarters. After its recent run-up, not surprisingly, the stock barely budged despite the standout report. However, as our fifth largest holding, we continue to recommend the company on actionable pullbacks.
· Walmart (WMT) reported adjusted earnings of $0.66 per share, in line with estimates, on revenue of $177.75 billion, a bit above expectations. However, the company’s CFO, John David Rainey noted within an interview that “I think higher tax returns muted some of the pressure related to higher fuel prices and as we’re in a period of time right now where those tax refunds are largely not coming in, I think consumers are going to feel more of that pressure from higher fuel prices. It’s something that we’re keeping a close eye on, but that expectation is built into our guidance for the second quarter.”
· Space Exploration Technologies Corporation (SpaceX), the company whose majority owner is Elon Musk, filed its preliminary Form S-1 registration statement with the SEC in preparation for its upcoming Initial Public Offering (IPO). Certainly, there is a lot of justifiable hoopla surrounding the company which is heavily involved in space (Falcon 9, Falcon Heavy, Dragon, Starship), communications (Starlink) and Artificial Intelligence (Grok) so we will be watching this closely as the launch date draws near. However, keep in mind that investors may be selling shares of other tech leaders to make room for SpaceX in their portfolios which, ironically, could create opportunities within those companies. FYI.
Economic Data That Drove Market Sentiment This Past Week…
· The Conference Board reported that its U.S. Index of Leading Economic Indicators edged 0.1% higher during April, after sliding 0.6% during March. The US LEI has fallen 0.7% over the trailing six months. According to Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators at The Conference Board, “the US LEI increased slightly in April, driven mainly by a rebound in stock prices and increases in building permits, only for two or more units. The leading index rose in two of the past three months, but the gains did not offset the steep fall registered in March.” (Source, The Conference Board)
· The University of Michigan reported that its Final May Reading of Consumer Sentiment fell to 44.8 (-10.0% y/y) from a preliminary May reading of 48.2 and from a final April 49.8, below the previous cycle low established in June 2022. The final May expectations component fell to 44.1 (-8.3%) from a preliminary May 48.5 and from a final April 48.1. Lastly, the final May current conditions component fell to 45.8 (-12.8% y/y) from a preliminary May 47.8 as well as from a final April 52.5. According to the Survey of Consumers Director, Joanne Hsu, “the cost of living continues to be a first-order concern, with 57% of consumers spontaneously mentioning that high prices were eroding their personal finances, up from 50% last month. Lower-income consumers those without college degrees posted particularly strong sentiment declines; these groups are more sensitive to increases in the cost of gas and other essentials.” (Source, Univ of Michigan)
· Housing Starts slid 2.8% or by 42000 to a seasonally adjusted annualized rate (SAAR) of 1,465,000 during April as compared to 1,507,000 in March (4.6% y/y). A study completed by Freddie Mac in 2018 estimates that there must be 1.6 million units built annually to account for household growth and to replace existing stock. During March, Single-family housing starts fell 9.0% or 92,000 to 930,000 from 1,022,000 (-2.4% y/y). Meanwhile, Multifamily housing starts rose 14.3% to 529,000 in April (23.3% y/y) from 463,000 during March. Building Permits, a key barometer for future starts, rose 79,000 to 1,442,000 in April as compared to 1,363,000 during March (-0.2% y/y). (Source, U.S. Census Bureau)
Economic Reports scheduled to be released this week, include the following – on Tuesday, May Consumer Confidence as reported by The Conference Board; on Thursday, Initial Claims for Unemployment Benefits, April Orders for Durable Goods, the First Revision to Q1 GDP, April Personal Income and Spending and finally, April New Home Sales.
Several potentially market moving companies are scheduled to report earnings, to include Zscaler (ZS), Snowflake (SNOW), Marvell Technology (MRVL), Salesforce (CRM), Synopsys (SNPS), Heico (HEI), Dell Technologies (DELL) and Autodesk (ADSK).