WEEKLY MARKET RECAP – May 22, 2026

Stocks shook off a weak start to the week and turned higher on Wednesday, helping the S&P 500 secure its eighth consecutive weekly gain—its longest winning streak since late 2023. The Dow led the major indexes, surpassing the record high it had set more than three months earlier. By Friday’s close, the S&P 500 and NASDAQ remained just below the record levels reached on May 14.

Bond market volatility tied to inflation concerns peaked on Tuesday, when the 30-year Treasury yield closed at 5.18%, its highest level since 2007. Although yields eased later in the week, they remained elevated, with the 10-year Treasury finishing at 4.56%, the highest level in a year.

The dominant role of mega-cap technology companies in driving market earnings became even clearer after the final “Magnificent Seven” firms reported results. According to FactSet, those seven companies posted average first-quarter earnings growth of 63%, compared with 17% for the other 493 members of the S&P 500. For the mega-cap group, it marked the strongest quarterly growth rate in nearly six years.

Oil prices remained volatile as developments in the Middle East continued to shift market sentiment. U.S. crude briefly climbed above $108 per barrel on Tuesday before retreating below $100 as diplomatic negotiations progressed. By Friday afternoon, oil traded near $97, down more than 4% for the week.

Consumer confidence weakened further, reaching a record low amid elevated energy costs. The University of Michigan’s final May sentiment reading fell to 44.8 from the preliminary estimate of 48.2 released earlier in the month. The decline marked a third consecutive monthly drop from February’s recent high of 56.6.

Minutes from the Federal Reserve’s latest meeting revealed that policymakers are considering holding rates higher for longer and potentially tightening further if inflation remains elevated. A majority of Fed officials indicated that additional restrictive policy measures could become necessary should inflation continue to exceed the central bank’s long-term 2% target.

Small-cap stocks outperformed large caps by a wide margin, extending their lead for the year. A small-cap benchmark gained 2.7% for the week, compared with a 1.1% rise for its large-cap counterpart.

Looking ahead, investors will focus on Thursday’s inflation report for updated insight into price pressures, particularly rising energy costs. The most recent Personal Consumption Expenditures reading showed inflation running at a 3.5% annual rate in March, while April’s Consumer Price Index climbed to 3.8%, the highest level in nearly three years.