WEEKLY MARKET RECAP – May 15, 2026

The S&P 500 extended its winning streak to seven consecutive weeks, though its modest 0.2% gain was a sharp slowdown from the stronger advances seen earlier in the rally. The NASDAQ and Dow both finished slightly lower after Thursday’s rebound gave way to renewed selling on Friday.

The recent sell-off in the bond market intensified, driving Treasury yields to their highest levels in at least a year. The 10-year Treasury yield climbed to 4.59%, up significantly from below 4.00% in late February. The 2-year yield ended the week at 4.08%, while the 30-year yield rose to 5.12%—its highest level since 2007.

Inflation data added to pressure on bond markets. April’s Consumer Price Index showed prices rising at a 3.8% annual rate, the highest since May 2023. Meanwhile, the Producer Price Index reached a 6.0% annual pace, its fastest increase since December 2022.

Markets have rapidly shifted expectations for Federal Reserve policy. Futures trading now suggests roughly a 50% chance that the Fed could raise rates by either a quarter-point or half-point before year-end, according to CME FedWatch. Markets are pricing in nearly equal odds that rates remain unchanged, while the probability of a cut has fallen to less than 1%.

Corporate earnings season has remained strong not only in profit growth but also in revenue generation. FactSet data showed S&P 500 companies on pace for first-quarter revenue growth of 11.4%, the strongest since the second quarter of 2022. Earnings growth was projected at 27.7%, the best performance since the fourth quarter of 2021.

On the policy front, the Senate confirmed Kevin Warsh as the new Federal Reserve chair, succeeding Jerome Powell after his eight-year tenure. Warsh is scheduled to preside over his first Fed meeting on June 16–17, while Powell will continue serving as a Fed governor for the time being.

Growth stocks continued to outperform value, with a large-cap growth benchmark beating its value counterpart for the sixth time in seven weeks, reversing the earlier trend of value leadership. Smaller companies lagged, however, as a small-cap benchmark fell 2.3% for the week.

The U.S. dollar strengthened notably, reaching a two-week high against a basket of major currencies on Friday and posting its fifth consecutive daily gain. The move reflected growing expectations that U.S. monetary policy could remain restrictive for longer.