S&P 500 Posts Longest Winning Streak Since Late-2023

Performance for Week Ending 5.29.2026:

The Dow Jones Industrial Average (Dow) added 0.9 percent, the Standard & Poor’s 500 Index (S&P 500) gained 1.4 percent, and the Nasdaq Composite Index (Nasdaq) tacked on 2.4 percent for the week ending May 29.

*See below for Index Definitions

MARKET OBSERVATIONS: 5.25.2026–5.29.2026

The S&P 500 marked its ninth straight weekly gain as optimism that the Iran conflict may be nearing an end helped drive oil prices and interest rates lower. After peaking at nearly $113 per barrel in early April, WTI oil prices finished the week down by over 9 percent to $87.36 per barrel. The plunge in oil prices helped ease inflation fears, which in turn pushed interest rates lower with the benchmark 10-year Treasury yield finishing at 4.4 percent, down from a recent peak of 4.6 percent. For the month of May, the S&P gained 5.2 percent, reflecting the much better than forecast Q1 earnings season.

Fed Speak: St. Louis Fed President Musalem said policymakers cannot depend on a potential productivity boom from artificial intelligence to ease elevated inflation. Musalem cautioned that, after accounting for inflation, the Fed’s benchmark rate is below the so-called neutral level that neither slows nor stimulates the economy. He also said the labor market is stable, inflation is “meaningfully above” the Fed’s 2 percent target and long-run inflation expectations are “drifting higher.” Fed Governor Bowman said that she still thinks the impact of the Iran war on inflation will be temporary. But if the conflict stretches on, price pressures could become broader and longer lasting. Bowman added that, for now, the Fed’s benchmark interest rate is “moderately restrictive,” and that’s working. On Friday, Philadelphia Fed President Paulson said that monetary policy is "well positioned" considering the unacceptably high inflation pressures and economic uncertainty. Paulson added that the Fed is ready "to react," and while she sees U.S. monetary policy in the right place, "I think it is healthy that market participants have taken on board scenarios where the (federal) funds rate remains unchanged for an extended period, as well as scenarios where further tightening becomes necessary." According to Bloomberg’s World Interest Rate Probability tool, investors are betting there is more than a 50 percent chance the Fed will raise rates by year’s end. The Fed’s next policy meeting takes place June 16-17, the first gathering led by new Fed Chairman Warsh.

Q1 Earnings Wrap Up: With 484 members of the S&P 500 already posting results, the first quarter earnings season has come to an end. Overall, earnings season was much stronger than anticipated with over 82 percent of companies beating expectations. Aggregate earnings for this group grew by nearly 28 percent from a year ago, more than double the 12.4 percent projected growth at the end of March. At the sector level, 10 of the 11 S&P sector groups posted positive year over year growth, with technology (+50.5 percent), communication services (+49.6 percent) and consumer discretionary (+40.6 percent) delivering the strongest gains. The strong quarterly results have led to analysts raising full year earnings growth expectations, which now stand at 23.5 percent for the full year. For 2027 earnings are estimated to grow by 15.8 percent.

Economic Roundup: Consumer confidence edged down in May as views of current economic conditions declined amid rising prices due to the Iran war. The Conference Board’s gauge of confidence decreased 0.7 points to 93.1 after an upward revision to the prior month. The median estimate called for a reading of 92. Applications for first time unemployment benefits rose slightly, while remaining at a level consistent with a stable labor market. Initial claims increased by 5,000 to 215,000 in the week ended May 23, the highest since mid-April. Continuing claims, a proxy for the number of people receiving benefits, rose to 1.79 million. Even after the recent uptick, both metrics are still near historically low levels. Sales of new U.S. homes declined in April by more than forecast as builder incentives failed to motivate potential buyers at the start of the spring selling season. Purchases of new single-family homes decreased 6.2 percent from March to a 622,000 annualized pace. Economists had expected a 660,000 rate. Meanwhile, mortgage rates increased last week to the highest level since August, restraining home-purchase activity and prompting a sharp pullback in refinancing. The contract rate on a 30-year mortgage rose 9 basis points to 6.65 percent in the week ended May 22, according to Mortgage Bankers Association data.

Outlook: While the outlook through the end of the year remains favorable, tactically it wouldn’t be surprising, following the 18 percent-plus run off the March 30 lows, if the market were to take a bit of a breather to digest the gains. In the near-term, headline risk around Iran and worries over inflation, are likely to result in choppy trading activity, but based on what we feel is a still favorable macro environment, we believe the market offers a solid risk/reward profile for longer-term investors—especially on pullbacks. From our point of view, the focus remains on the building blocks of equity investments—earnings, the economy and interest rates—all of which we believe will remain supportive in the quarters ahead.

The Week Ahead: The focal point of this week’s data calendar will be the payroll report for May on Friday. According to economists polled by Bloomberg, nonfarm payrolls are expected to expand by 85,000 while the unemployment rate is expected to hold steady at 3.4 percent. Other labor market data due out include Job Openings and Labor Turnover (JOLTS) on Tuesday and the ADP’s report of private payrolls on Wednesday. For a check on growth, the focus will also be on the May ISM manufacturing index (Monday), followed by the ISM services index (Wednesday). Earnings will continue to wind down with just 10 members of the S&P 500 scheduled to release results, including Broadcom, Palo Alto Networks, and CrowdStrike. It will be a busy week for Fed speak with six presentations scheduled. The Fed is also scheduled to release its Beige Book report on Wednesday.

— By Michael Schwager, Chief Market Strategist, Managing Director

Definitions

The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally defined as the leaders in their industry. It has been a widely followed indicator of the stock market since Oct. 1, 1928.

Standard and Poor's 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Nasdaq Composite Index is a broad-based capitalization-weighted index of stocks in all three Nasdaq tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of Feb. 5, 1971.

This material contains opinions of the author, but not necessarily those of Guggenheim Partners, LLC or its subsidiaries. The opinions contained herein are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. No part of this material may be reproduced or referred to in any form, without express written permission of Guggenheim Partners, LLC.