The week of May 11-15, 2026 was marked by volatility, with the Nasdaq closing slightly negative at -0.10% and the S&P 500 delivering a marginal gain. The equity market faced significant pressure due to rising interest rates and geopolitical concerns. Meanwhile, Q1 earnings season remained very positive, with about 80% of S&P 500 companies reporting above expectations, driven by investments in AI and technology.
The bond market was the negative highlight, with the yield curve +15/20bps for the week: the UST 30Y surpassed 5% and the UST 10Y traded around 4.60%. The rise in rates was driven by high inflation prints (CPI at 3.8% and PPI at 6.0%) due to the energy shock, with oil prices still under pressure, climbing more than 25% just in the last 30 days due to the US-Iran conflict. The market repriced expectations for Fed monetary policy, now anticipating a hike in 2027.
The US-China summit in Beijing yielded limited trade progress, while tensions with Iran remained elevated with proposals for new maritime fees in the Strait of Hormuz. Putin announced a trip to China for bilateral meetings. For the upcoming week, highlights include Nvidia's earnings, April Fed minutes, and new economic data.
