To The Moon

For week ending Fri, 29 May 2026, no economic reports could derail the final trading week of May 2026 as US market decided to close on a high,

Not even simmering tension and flares between US & Iran, as pockets of warring clashes erupted throughout the week.

In short, the US market was simply on a roll.

Following the brief Memorial Day holiday (25 May 2026) reprieve, institutional and retail capital alike poured into equities, enabling major benchmarks to book monumental milestones. (see below)

The DJIA.

On Fri, 29 May 2026, the Dow closed the week at 51,032.46: (see above)

• For the day, it was up by +0.72% or 363.49 points.

• For the week, it was up by +0.9% or 452.76 points.

This is a significant moment for the Dow because it is not a technology-heavy index, like Nasdaq.

Its surge above the psychological 51,000 threshold, for the first time in financial history, signals that the rally was no longer confined to just the most speculative growth names, even though tech still plays a major role.

Apart from being the most symbolic headline of the 3 composite indexes, what this index says about the tape is that investors were comfortable paying up for quality, earnings stability, and cash-flow strength.

On the concluding sentence, I reserve my doubts on the ‘truth’ behind it. Mmm…

The S&P 500.

On Friday, the S&P 500 closed the week at 7,580.06: (see above)

• For the day, it was up by +0.22% or 16.43 points.

• For the week, it was up by +1.49% or 106.59 points.

The more important details are its higher Friday closing:

• Marked its 7th consecutive daily gain.

• Secured its 9th straight winning week, its longest continuous weekly winning streak documented for the benchmark index since 2023.

However, before an investor gets too bullish about the S&P 500 index, here’s the “real” reality.

Actually, 9 of 11 primary S&P 500 sectors ended in the red:

• Consumer staples (XLP) and Communication services (XLC) lead the laggards, falling by -2.0% and -1.7% respectively.

• The two gainers were Technology (XLK) and Financials (XLF), rising by +1.87% and +0.56% respectively.

By now, we should be too aware that $Dell Technologies Inc.(DELL)$ by itself, helped to boost XLK gains.

On Friday, its shares skyrocketed by +32.76%, after the enterprise hardware provider delivered a stunning Q1 2026 revenue and profit beat, alongside an upward revision to its full-year fiscal guidance. (see below)

As of 29 May 2026

Like it or not, the S&P 500 index was effectively rescued from a broad-based decline by just 2 sectors.

As the S&P 500 is market-capitalization-weighted, the immense scale of mega-cap technology and the systemic strength of large commercial banking institutions single-handedly neutralized the losses across the remaining 9 sectors.

This highlights inherent “flaw” of profound concentration of power within current market structures.

The Nasdaq.

On Friday, the Nasdaq closed the week at 26,972.62: (see above)

• For the day, it was up by +0.20% or 55.15 points.

• For the week, it was up by +2.24% or 591.06 points.

Its weekly gain was the strongest of the 3 major benchmarks.

It is only fitting because Nasdaq remained the clearest expression of the market’s enthusiasm for (i) AI infrastructure, (ii) semiconductors, (iii) cloud software, and (iv) high-growth technology.

The week’s tone was set by a powerful AI narrative, helping Nasdaq to maintain momentum even when broader macro concerns - eg. creeping inflation and 3-month Middle East tension, might have triggered profit-taking.

The tech index’s gains have been gradual, followed by a record finishing cap, that is often a sign of sustained institutional demand rather than speculative chasing.

Nasdaq’s May 2026 gains (+8.36%) have been especially strong, reinforcing the notion that technology remained US market’s dominant growth engine.

Last Week’s Economic Reports.

Regardless of how vibrant the US market was last week, it remains crucial to understand the detailed economic reports, as they reveal (a) the state of the US economy and (b) where it may be heading in the months ahead.

Reports out last week include:

• Tue, 26 May 2026 - Consumer confidence for May 2026.

• Thu, 28 May 2026 - US Q1 2026 GDP - 2nd revision.

• Thu, 28 May 2026 - Personal consumption expenditure (PCE) for April 2026.

• Thu, 28 May 2026 - Jobless claims - weekly & continuing.

• Fri, 29 May 2026 - Advanced U.S. trade balance in goods for April 2026.

US Consumer Confidence.

US’s Conference Board (CB)’s Consumer confidence index for May 2026, fell by -0.7 points to 93.1 vs market consensus of 91.9 vs April 2026’s upwards revised 93.8. (see above)

This comes amidst mounting (a) US domestic inflation concerns and (b) global rising energy costs tied to the 3-month Middle East geopolitical conflict that is showing no signs of abating, despite the entire Trump administration’s consistent “cry wolf” antics.

Key takeaways::

(1) Present Situation vs. Expectations:

Consumers' assessment of current (present situation) business and labour market conditions declined by -3.2 points, to 121.2. (see above)

Conversely, the expectations index on the short-term outlook rose slightly by +1.0 point to 74.4:

• 2 of its 3 components, net expectations for (1) business and (2) labour market conditions - 6 months from now, inched up.

• 1 of 3 component, net expectation for (3) household income was slightly less positive.

(2) Spending Habits:

• Rising prices and gas costs led consumers to delay major purchases and limit overall spending, prioritizing essentials, beauty products, and "cheap thrills".

(3) Labour Market:

• Perceptions of current job availability dipped, with the share of consumers viewing jobs as not plentiful, reaching its highest level since 2021.

US Gross Domestic Product (GDP)

US Bureau of Economic Analysis (BEA) 2nd estimate for Q1 2026 GDP, showed that US economy grew at a 1.6% annualized rate.

This is a marked a downward revision of -0.4% from 30 Apr 2026’s initial estimate of 2.0%.

The downward revision was largely driven by (a) weaker-than-expected investment and (b) consumer spending:

• Inventory Investment: A drop in private nonfarm inventory investment (specifically in the manufacturing and retail trade sectors) was the largest contributor to the downgrade.

• Consumer Spending: Services saw a downward revision, most notably in health care and outpatient/hospital services, that offset a slight upward revision to goods.

Personal Consumption Expenditure.

The April 2026 PCE report was hotter than March on both headline & core annual measures, even though the month-over-month core reading cooled.

Headline PCE.

• MoM inflation came in at 0.4% vs analysts’ estimates of 0.5% vs March 2026’s 0.7%.

• YoY inflation was 3.8% inline with analysts’ estimates vs March 2026’s 3.5%. The latest is the highest level since May 2023.

Core PCE.

• MoM core inflation was 0.2%, marginally lower than analysts’ estimates of 0.3% vs March 2026’s 0.3%.

• YoY core inflation was 3.3% in line with analysts’ estimates of 3.3% vs March 2026’s 3.2%. This is the biggest annual ​gain since November 2023.

Summary.

The latest data shows a complicated, split picture of the US economy:

Energy is Driving Headline Inflation:

• The big gap between low monthly core inflation (0.2%) and the higher headline inflation (0.40%) is due to sudden supply cuts.

• The active Middle East conflict keeps oil prices unstable, driving up local gas prices and home utility bills.

The "Last Mile" is Stalled:

• Yearly core inflation rising to 3.3% indicates US inflation will not ease smoothly back to the Fed's 2% target.

• Broad-based services inflation is proving sticky enough to offset minor cooling in manufacturing or supply chain components.

FOMC June 2026 Meeting.

For the June 17-18 FOMC meeting, the PCE reports support a hold on interest rate cut and it makes it harder for the committee to sound confident about imminent rate cuts.

Several market and press reports have already suggested that new Fed chair Kevin Warsh would face a difficult inflation backdrop, with economists arguing the central bank may even need to acknowledge the possibility of a future hike if inflation stays elevated.

Jobless Claims.

US jobless claims reports point to a US labour market that is still resilient, but no longer accelerating.

Initial claims remain historically low, while continuing claims are drifting higher only modestly.

This is consistent with fewer layoffs compared to what a weakening labour market would normally produce. However, some workers are finding re-employment taking longer than expected.

(1) Weekly claims.

For week ending 23 May 2026, weekly jobless claims rose by +5,000 to 215,000 vs market estimates of 210,000 vs previous week’s upwards revised 210,000 claims. (see below)

This marks the highest level of new weekly filings since mid-April 2026.

At the same time, the 4-week average rose by +6,250 to 209,000.

This is considered still a very low level by historical standards and suggests:

• Layoffs remain contained.

• Employers are not moving into broad cost-cutting mode.

(2) Continuing claims.

For week ending 16 May 2026,continuing claims rose by +15,000 to 1.786 million vs market estimates of 1.78 millio vs previous week’s downwards revised 1.771 million.

The 4-week average rose by +2,500 to 1.773 million., while the insured unemployment rate (that has been broadly steady since late 2025), remained at 1.2%, confirming that the vast majority of the insured workforce remains securely employed.

Overall, the 2 reports are “neutral” in nature.

US Advanced Trade Balance.

-82.40 billion vs market estimates of -$86.7 billion vs March 2026’s -$85.3 billion

For April 2026, US goods exports rose by +4.0% to a record $219.7 billion, up from March 2026’s $211.2 billion.

Goods imports increased more slowly, up by +1.9% to $302.1 billion, up from March 2026’s $296.5 billion.

As a result, the US Commerce Department's Census Bureau report showed a US trade deficit narrowed by $2.9 billion to –$82.4 billion vs analysts’ estimates of –$86.7 billion deficit vs March 2026’s –$85.3 billion. (see above)

Goods exports surged across most categories:

• Capital goods exports jumped by +7.5%.

• Consumer goods exports rose by +7.8%.

• Industrial supplies (include energy), increased by +2.1%.

• Motor vehicles & parts exports fell by -2.8%,.

• Foods, feeds, & beverages exports also edged down by -0.3%.

Imports grew modestly and were mixed by category:

• Capital goods imports (largely AI-related equipment & chips), rose by +5.6%. A clear indication of strong US business investment in AI.

• Industrial supplies imports fell by -1.9%,.

• Motor vehicles and parts imports dropped by -1.5%.

• Consumer goods imports declined by -1.0%.

• Foods, feeds, & beverages imports increased slightly by +0.3%

Overall, the April goods trade report shows a resilient US economy driven by (a) strong exports and (b) AI investment, with moderate domestic demand and a trade deficit that is less of a drag on growth.

Having said that, existing policy and geopolitical risks could shift import dynamics in the coming months.

US Market in new June 2026.

For the week beginning 01 Jun 2026, US markets are likely to continue their upward momentum, building on last week's record closing.

Market rally should remain concentrated in $Technology Select Sector SPDR Fund(XLK)$ and $Financial Select Sector SPDR Fund(XLF)$ and (likely) continue to rotate out of $Consumer Staples Select Sector SPDR Fund(XLP)$ and $Communication Services Select Sector SPDR Fund(XLC)$.

This creates a vulnerability / risk if mega cap tech or bank stocks falter.

Will the latest strike and counterstrike between US and Iran on 01 Jun 2026, dampen US market positive sentiments ? This as peace negotiation is still work-in-progress ? (see below)

However, if Trump officially signs the 60-day truce memorandum with the new Iranian government this week, a fresh wave of market optimism could drive US stocks to yet another historic high.

What is the probability of the MOU signing this week, even as the ticking midterm election clock intensifies the political pressure on the incumbent ?

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