LPL Research provides its Weekly Market Performance for the week of May 11, 2026. U.S. equities held up well this week, with the S&P 500 posting a modest weekly gain and hitting a record high on Thursday, supported by AI-driven enthusiasm despite higher oil prices and rising Treasury yields. Macro headwinds, including rising energy costs and elevated inflation, along with limited progress on U.S.-China trade and Middle East tensions, pressured investor sentiment. International equities underperformed, weighed down by a stronger U.S. dollar, rising global rates, and profit-taking in Asia following a “sell-the-news” reaction to the Trump-Xi summit.

Fixed income markets declined as yields rose globally, driven by inflation pressures, higher oil prices, and political uncertainty, particularly in the U.K. High yield credit remains resilient but expensive, with tight spreads and improving fundamentals suggesting limited upside without a downturn.

Stock Index Performance

S&P 500 Index Sectors

Fixed Income and Commodities

Source: LPL Research, Bloomberg 5/15/26 @3:54 p.m. ET
Disclosures: Indexes are unmanaged and cannot be invested in directly.

U.S. and International Equities

U.S. Equities: As trading for the week drew to a close, the S&P 500 was clinging to a modest weekly gain, setting a fresh all-time high along the way and extending its winning streak to seven weeks. Investor focus was on inflation data early in the week and the Trump-Xi summit late in the week, neither of which offered any relief for oil or the rates markets. A double-digit increase in oil and sharply higher Treasury yields weighed on trading Friday. However, enthusiasm for AI, reflected in the sharp gains in Cisco (CSCO) and NVIDIA (NVDA), the well-received Cerebras Systems (CBRS) IPO, rebounds in some leading software names, and the possibility of trade deals with China were enough to keep large cap indexes above water despite some weakness in semiconductors broadly.

Although the status quo with China was not necessarily viewed negatively by strategists, the lack of confirmed agreements on trade and lack of progress on a resolution to the U.S.-Iran conflict did contribute to a challenging week for sector laggard consumer discretionary, which continues to struggle with high oil prices. The increasingly challenging macroeconomic backdrop also pressured sentiment toward small caps, which finished solidly lower on the week and kept market chatter about a lack of breadth front and center for market-watchers. With earnings season largely over, except for chip giant NVDA on May 20 and some May quarter-end reporters in retail, market attention will be focused on the Strait of Hormuz, ongoing inflation pressures, and the leadership transition at the Fed.

International Equities: Developed international and emerging market equities lagged significantly behind the broad U.S. large cap equity market for the week. A surge in the U.S. dollar and high oil prices, which have contributed to upward pressure on interest rates globally, were the biggest drags on the non-U.S. indexes, although Asian equities were also hurt by the sharp intra-week reversal in Korean memory names.

Weakness in developed international markets was broad based with declines in France, Spain, Germany, and Italy on the European side and Australia and Japan in Asia-Pacific. Political strife in the U.K. continued to weigh on the British market, while yields on Japan’s long bond hit multi-decade highs. Weakness in Asian markets permeated through emerging markets as China, India, and Taiwan lagged the U.S. on the Asia side, in part due to profit taking as the Trump-Xi summit reaction seemed to be a sell the news event. Latin America was also weak as commodities outside of oil were mostly lower, particularly precious metals.

Fixed Income, Currency, and Commodity Markets

Fixed Income: Core bonds, as measured by the Bloomberg Aggregate Index, declined over the week. The rise in U.S. Treasury yields this week was driven by higher oil prices, firmer inflation readings in the U.S., and the spillover effects from the broader global bond sell-off — most notably in the U.K. In the U.K., intensifying inflationary pressures, combined with increased political uncertainty surrounding Prime Minister Keir Starmer’s leadership, pushed 30-year gilt yields to their highest levels since 1998.

The high yield market also traded lower over the last five days, which remains broadly sanguine yet sensitive to an evolving risk landscape, as the conflict in the Middle East persists, and domestic consumer pressures mount. Per Bloomberg, approximately $41 billion in market value was trading at spreads wider than 1,000 basis points across the high yield index as of May 5, down from $50 billion at the end of February. As such, nearly a quarter of the index’s option-adjusted spread (OAS) is attributable to the widest 5% of issuers by market value. At current levels, OAS are in the third percentile of historical spread valuations (meaning spreads have been higher 97% of the time since 2001). Removing the weakest credits suggests that valuations are even more expensive.

That said, corporate default rates are declining, distressed exchanges are easing, and the number of liability management exercises is falling, indicating improving quality within the broader high yield market. Additionally, the quality of the index has improved in recent years, with BB-rated securities now representing a record-high share of over 56%. As a result, absent an economic contraction (which is not our base case), spreads can remain at these very tight levels; however, we believe the likelihood of further tightening is low. Overall, the additional compensation for owning higher-risk corporate credit is unattractive, in our view.

Commodities and Currencies: The broader commodities complex rose this week on the back of double-digit gains in crude oil prices. WTI crude settled at $105.42 (+4.2% Friday) and Brent closed just shy of $110 as the Trump-Xi summit yielded no progress on reopening the Strait of Hormuz. Trump said he didn’t press Xi on Iran, though both agreed the waterway “must remain open.” While oil was the weekly winner, precious metals finished at the opposite end of the commodities leaderboard. Gold was hurt by a surging U.S. dollar and a more hawkish market outlook for monetary policy that increased the relative attractiveness of bonds relative to gold. A volatile week has left silver prices down as well. Industrial metals held up well as AI investment continued to support copper globally.

The U.S. dollar strengthened this week, with the Bloomberg Dollar Spot Index up 1.2% for its best week since early March. Repricing for a more hawkish Fed and safe haven buying amid heightened geopolitical uncertainty were among key drivers for the greenback which broke back above its 50- and 200-day moving averages. The yen remained in focus, weakening for five straight sessions toward 159. USD/JPY approached levels last seen before the April 30 intervention.

Economic Weekly Roundup

Medical Care Drove Consumer Inflation. April inflation rose 0.6% month over month, pulling the annual pace up to 3.8% from 3.3% in March. The reacceleration was expected, so investors need to focus more on services to get a bead on the overall trajectory. The so-called “Supercore” (which focuses on services ex housing) accelerated to 3.4% from a year ago from rising medical care services. This pace will likely continue as demand for health care increases as the population ages.

The Fed will almost certainly be on hold for the next two quarters as rates remain elevated since inflation is not expected to ease in the same way investors anticipated just a few months ago.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: New York Fed Services Business Activity (May), NAHB Housing Market Index (May), Total Net TIC Flows (Mar), Net Long-term TIC Flows (Mar)
• Tuesday: ADP Weekly Employment Change (May 2), Pending Home Sales (Apr)
• Wednesday: MBA Mortgage Applications (May 15), FOMC Meeting Minutes (Apr 29)
• Thursday: Initial Jobless Claims (May 16), Continuing Claims (May 9), Philadelphia Fed Business Outlook (May), Housing Starts (Apr), Building Permits (Apr preliminary), S&P Global U.S. Manufacturing, Services, and Composite PMIs (May preliminary), Kansas City Fed Manufacturing Activity (May)
• Friday: University of Michigan Consumer Sentiment Report (May final), Kansas City Fed Services Activity (May), Bloomberg U.S. Economic Survey (May)