May 2026 Monthly Market Review

An excerpt from our May 2026 Monthly Market Review:

U.S. equity markets rose further in May, extending April’s large gains. Hopes for an imminent opening of the Strait of Hormuz, strong corporate earnings growth, and speculative ardor for all things AI remained the main catalysts for the continued rally. The massive, planned IPOs announced by SpaceX, Open AI, and Anthropic are emblematic of the AI frenzy gripping global equity markets. Advanced and emerging non-U.S. equity markets also rose in May. Among emerging equity markets, Korea and Taiwan generated especially strong returns reflecting a continued surge in their dominant semiconductor industries. U.S. Treasury yields were little changed in May. In the U.S. credit markets, spreads remained compressed across the rating spectrum. Interest rate futures continued to price in a slight bias toward Fed tightening this year, a marked change from before the war. Oil prices plummeted in May but stayed well above pre-war levels amid continued high market volatility. The U.S. dollar appreciated modestly.