Stocks Start Shortened Week Near ATHs 26/05/2026

 


HOT stories for today

Market wrap:

• Stocks climbed Friday, helped by renewed strength in the AI trade and a slight cooling in the bond-market pressure that rattled investors earlier in the week. The S&P 500 rose 0.9% for the week, marking its longest weekly winning streak since late 2023. The Dow gained 2.1%, its third weekly advance in four weeks, while the Nasdaq added 0.5%, notching its seventh gain in the past eight weeks. Nvidia helped keep the AI rally intact, while the swearing-in of Kevin Warsh as the new Federal Reserve chair may have helped calm some concerns in the bond market. Still, the week was shaped by a long list of macro worries, including oil prices, inflation, potential Fed hikes and rising mortgage rates.
• By Friday, investors rotated back into the growth and AI-linked trades that have continued to survive repeated warning signs. One softer signal came from consumers. The University of Michigan’s sentiment index fell to 44.8 in May, a record low and below levels seen in both 2022 and 1978. Stock futures moved higher early Tuesday as oil prices fell sharply and optimism grew that a U.S.-Iran resolution could be within reach. President Donald Trump said talks with Iran were “proceeding nicely,” though he warned the U.S. could still go on the offensive if negotiations fail. WTI crude futures dropped more than 5% after the comments, easing some inflation and supply-shock concerns. The shortened trading week starts quietly on the economic front, with consumer confidence data the main release in focus.

Summer Rally Faces Midterm Test

• The S&P 500 entered Memorial Day weekend on an eight-week winning streak, its longest since 2023, as investors continued to look past rising bond yields, geopolitical risks and sticky inflation concerns. But technical strategists are warning that the summer stretch could become more difficult. Historically, midterm-election years have been challenging for stocks, with the S&P 500 averaging a 2.8% decline from the end of April through September, according to Dow Jones Market Data. This year has started differently. The index is already up 3.7% in May, helped by strong earnings, AI momentum and investor confidence that the economy can withstand higher rates.
• Still, analysts note that the VIX remains unusually elevated for a market trading near record highs, suggesting unease beneath the surface. Political uncertainty could also start to matter more as investors shift focus from earnings to the midterm fight for control of Congress. The second and third quarters of midterm years have historically been the weakest part of the presidential cycle. Seasonality is only part of the risk. Markets are also dealing with elevated oil prices, the Iran conflict, higher long-term yields and the possibility that inflation keeps the Federal Reserve cautious. For now, strong earnings and AI-related enthusiasm continue to support stocks. But as June approaches, investors may find that the easy part of the rally is already behind them.

Stocks on the move:

• D-Wave Quantum (QBTS): Shares rose 14%, while Rigetti Computing (RGTI) climbed nearly 20% after the Commerce Department signed letters of intent for $2.013 billion across nine quantum companies.
• PDD Holdings (PDD), Alibaba (BABA): U.S.-listed shares fell after China said it would crack down on illegal cross-border securities trading. PDD dropped nearly 6%, while Alibaba lost 4.5%.
• Deckers Outdoor (DECK): Shares slipped 2% despite beating fiscal fourth-quarter earnings and revenue estimates and boosting its buyback by $3.5 billion.
• BJ’s Wholesale Club (BJ): Shares rose 2% after first-quarter earnings and revenue topped expectations, while the company reaffirmed its full-year guidance.
• Advanced Micro Devices (AMD): Shares gained more than 1.5% after CEO Lisa Su said elevated CPU demand could last for five years.

Watchlist: QBTS, NVDA, QCOM, MU, AZO, PONY, VNET, MSFT

Key Economic Events Today:

EST time

10:00 am: USD Consumer Confidence



Earnings

BMC (Before Market Open): Pony AI (PONY), VNET Group (VNET), AutoZone (AZO), Elbit Systems (ESLT)

AMC (After Market Close): Zscaler (ZS), Semtech Corp. (SMTC), ViaSat Inc. (VSAT), Masimo Corp. (MASI), Boksz Inc. (BOX)




The TEFS Analyst team wishes you a successful day!