U.S. equities extended their historic rallies between May 26 and May 29, 2026, with the S&P 500 rising 1.4% and marking its ninth consecutive week of gains. The main drivers were an exceptional corporate earnings season, with approximately 27% profit growth in the first quarter—more than double the initial estimates—and strong AI demand, as seen by the surge of over 30% in Dell shares following robust results and strong guidance. Technology indices led the movement, with the Nasdaq up 2.4%, while the Dow Jones rose 0.9%, and small caps (Russell 2000) advanced 1.7%.
In fixed income, Treasury yields retreated 8-12 bps over the week, with the 10-year rate around 4.45% and the 30-year just below 5.00%, reflecting reduced geopolitical tensions and easing inflation concerns. However, higher-than-expected April inflation data—with the PCE rising to a 3-year high of 3.8%—kept the market pricing in a 50% probability of a 25 bps rate hike later in 2026. Corporate credit spreads remained tight. In commodities, oil fell nearly 10% on hopes for a peace agreement, while gold traded up 0.7%, and the DXY dollar index fell 0.3%.
The geopolitical scenario remains in the spotlight, with Trump initially stating that peace negotiations were progressing positively. However, over the weekend, new U.S. strikes in the Persian Gulf drove oil prices back up—even so, the month of May recorded its biggest monthly drop since 2020. In the week ahead, the focus will be on the May Payroll employment report and ISM manufacturing data, which will indicate whether the labor market and economy are cooling or if inflation is strengthening, in addition to Fed speeches and developments in the Middle East.
