Geopolitical
May began with investors watching the ongoing tensions in Iran and shipping routes through the Strait of Hormuz. Oil prices moderated as investors became more optimistic that a broader escalation could be avoided. And as geopolitical fears cooled, investors were able to refocus on earnings, economic data, and the continued growth of the US Economy.
Stock Market Performance
U.S. equities posted solid gains in May, led by technology and growth names. The NASDAQ surged over 8%, while the S&P 500 advanced 5.15%. Small-caps in the Russell 2000 joined the rally with a 4.27% gain, signaling broader market participation. Technology continued to lead the way and enthusiasm surrounding AI infrastructure, semiconductor demand, and strong corporate earnings fueled much of the rally. By month-end, the major indexes had posted one of their strongest stretches of gains in several years, extending an already impressive recovery from the volatility seen earlier in 2026.
Federal Reserve and Economic Data
May brought a major leadership change at the Federal Reserve as Kevin Warsh officially became Fed Chair on May 22, succeeding Jerome Powell after eight years at the helm. Although the economic data is supportive of US markets and inflation showed signs of moderation, we are unsure if we will get the rate cuts the American Middle Class needs to restart the housing market.
Commodities and Mortgage Rates / Borrowing Costs
Silver was a standout performer, rising more than 8% during May. Borrowing costs improved slightly as the 10-Year Treasury Yield ended May near 4.50%, down from April levels, and the average 30-year fixed mortgage rate eased to approximately 6.51%. Although financing costs remain well above pre-pandemic norms, the decline provided some relief for borrowers and supported optimism.
Looking Ahead
While volatility is likely, innovation, demand for commodities, and economic resilience support a measured optimistic outlook for diversified portfolios.
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