LPL Research provides its Weekly Market Performance for the week of May 18, 2026.

Stock Index Performance

S&P 500 Index Sectors

Fixed Income and Commodities

Source: LPL Research, Bloomberg 5/22/26 @3:15 p.m. ET
Disclosures: Indexes are unmanaged and cannot be invested in directly.

U.S. and International Equities

Global equity markets finished the week higher after rebounding from early declines, supported by easing geopolitical tensions, lower interest rates, and another solid round of corporate earnings. International developed markets outperformed, with the MSCI EAFE Index gaining more than 2%, while emerging markets advanced over 1.5%. The S&P 500 rose 1%, extending its winning streak to eight consecutive weeks, its longest stretch of weekly gains since 2023.

Investor sentiment improved as optimism surrounding a potential agreement between the U.S. and Iran helped reduce geopolitical concerns. Reports indicating progress on the latest peace proposal, combined with a pullback in both Treasury yields and oil prices, provided additional support for broader risk assets.

On the policy front, Kevin Warsh was officially sworn in as the new Chair of the Federal Reserve (Fed) on Friday. Warsh takes over an increasingly divided Fed, with minutes from the April Federal Open Market Committee meeting revealing a more hawkish tone among policymakers. The minutes showed that “many” participants favored removing the easing bias from the Fed’s policy statement as inflation risks remain elevated.

U.S. Equities: Momentum continued this week for U.S. equities, with the S&P 500 finishing the week back near record-high territory. Buying pressure was broad, as advancing shares on the index outpaced decliners by around 3:1. Small caps outperformed, with the Russell 2000 rallying nearly 3% and finishing the week just below its early May high. Hope for a continued path toward deescalation with Iran, stabilizing interest rates, and continued earnings strength supported risk appetite. S&P 500 earnings growth is tracking near 30% for the first quarter, materially ahead of expectations entering reporting season. Performance has once again been heavily influenced by mega-caps. The “Magnificent Seven” delivered earnings growth of roughly 63% during the quarter, accounting for more than half of the S&P 500’s total earnings growth. Still, strength beneath the surface has been better than many appreciate, with the remaining S&P 493 generating a solid 17% earnings growth rate this quarter, according to FactSet.

NVIDIA (NVDA) remained a primary market focus after delivering another strong beat-and-raise quarter, with management highlighting “parabolic” demand tied to AI infrastructure spending. The results reinforced confidence in the secular AI growth theme that continues to drive leadership within large-cap technology.

Retail earnings also drew attention this week following results from Walmart (WMT) and Target (TGT), where management commentary pointed to growing concerns around the durability of lower-income consumer spending trends.

International Equities: International equity markets moved higher this week, led by developed markets as easing geopolitical concerns and lower global interest rates supported risk sentiment. The MSCI EAFE Index gained roughly 2.5% amid growing optimism surrounding a potential Middle East peace agreement. In Europe, the STOXX Europe 600 posted gains in all five trading sessions and advanced 3%, while Germany’s DAX climbed nearly 4% on the back of solid earnings results and improving consumer and business confidence. Japan’s Nikkei 225 recovered from sharp losses earlier in the week to finish up 3%, supported by softer-than-expected inflation data and a decline in Japanese government bond yields. China lagged broader international markets, with the Shanghai Composite slipping 0.5% amid ongoing concerns surrounding domestic growth and uneven economic momentum.

Fixed Income, Currency, and Commodity Markets

Fixed Income: Core bonds, as measured by the Bloomberg Aggregate Index, were slightly higher on the week, with Treasury yield declines as the primary driver of returns. Investment-grade credit spreads were marginally higher on the week but remain at very low levels.

As discussed in this week’s LPL Market Signals, global bond markets have faced several headwinds since the onset of the Iran conflict. These include rising inflation expectations, higher term premia, a repricing higher in monetary policy rate expectations, and — particularly in the U.K. — an increase in political risk premia. As a result, 10-year developed market yields have risen by roughly 40–60 basis points, with U.K. gilts leading the move higher (+66 bps). In the U.S., the primary driver of higher yields has been an increase in real yields (as reflected in Treasury Inflation-Protected Securities, or TIPS), driven by a repricing of Fed rate expectations. Markets are currently pricing in approximately a 50% probability of two rate hikes over the next 12 months. This week’s FOMC meeting minutes struck a hawkish tone; however, we believe the hurdle for additional rate hikes is higher than the Fed simply maintaining its current policy stance — absent a meaningful unanchoring of inflation expectations, which we have not yet observed. As a result, real yields are now at their highest levels in decades, with the 10-year TIPS yield at 2.14% and the 30-year TIPS yield at 2.84%. TIPS are U.S. government bonds designed to preserve purchasing power, as their principal adjusts with inflation. Investors therefore earn a return tied to CPI increases plus a fixed real yield. In effect, regardless of the path of inflation, investors locking in these securities today can expect to earn approximately 2.14% and 2.84% in real terms over the next 10- and 30-year periods, respectively. For investors seeking inflation protection, current yields are elevated relative to historical levels, offering both explicit protection against inflation surprises and attractive real carry.

Commodities and Currencies: The broader commodity complex moved lower this week, pressured primarily by weakness in energy markets as geopolitical headlines surrounding Iran shifted modestly toward de-escalation. President Trump postponed planned strikes on Iran earlier in the week to allow additional diplomatic negotiations to take place. Still, uncertainty remained elevated amid reports of a proposed Iran-Oman toll arrangement through the Strait of Hormuz, Iran’s resistance to transferring enriched uranium out of the country, and renewed concerns following a strike on a United Arab Emirates nuclear facility, all of which raised questions about the durability of any potential peace agreement.

Brent crude declined roughly 5% on the week but continued to hold above key technical support near $98. Precious metals also weakened as markets increasingly priced in the possibility of a Fed rate hike later this year. Platinum and palladium underperformed in metals, while gold slipped less than 0.5%. Industrial metals were firmer overall, led by a 1.5% gain in copper as ongoing supply concerns continued to support prices.

Agricultural commodities outperformed, with corn, wheat, and soybeans each advancing more than 1%. Fertilizer shortages tied to the effective closure of the Strait of Hormuz have further tightened supply conditions across the agriculture sector, particularly during a critical period for North American crop production.

Meanwhile, the U.S. dollar finished little changed on the week and continued to diverge from rising interest rates. Structural pressures, including central bank diversification away from the dollar, shifting global monetary policy expectations, and concerns surrounding the U.S. fiscal outlook, have continued to weigh on the currency despite elevated Treasury yields.

Economic Weekly Roundup

The economic calendar was relatively light this week, with the April FOMC meeting minutes (Wednesday), University of Michigan survey data (Friday), and the official swearing in of Kevin Warsh as the new Fed Chair (Friday) highlighting the week.

According to the minutes to the FOMC’s April meeting, which was generally perceived as hawkish, FOMC “participants generally” judged that elevated inflation could require keeping the fed funds rate unchanged for longer than they had previously anticipated. Market-implied expectations for the fed funds rate at the end of 2026 were roughly unchanged following the release of the minutes. Markets have priced in one full rate hike in 2026.

Friday’s University of Michigan surveys again noted that inflation and the broader cost of living continue to be first-order concerns. The report also mentioned that “consumers appear worried that inflation will increase and proliferate beyond fuel prices, even in the long run.”

Finally, also on Friday, Warsh was sworn in and will become the 17^th Fed Chair in its history (11^th in the post 1935 Banking Act era). Warsh has noted that he wants to bring “regime change” to the central bank, including shrinking the Fed’s $6.7 trillion balance sheet, establishing a new framework for analyzing inflation, and changing how the institution communicates with the public. Most of his intentions, however, require consensus approval.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: Memorial Day Holiday, no economic releases scheduled
• Tuesday: ADP Weekly Employment Change (May 9), Chicago Fed National Activity Index (Apr), Philadelphia Fed Non-Manufacturing Activity (May), FHFA House Price Index (Mar), House Price Purchase Index (1Q), S&P Case-Shiller 20-City and National House Price Indexes (Mar), Conference Board Consumer Confidence report (May), Dallas Fed Manufacturing Activity (May)
• Wednesday: MBA Mortgage Applications (May 22), Richmond Fed Manufacturing Index and Business Conditions (May), Dallas Fed Services Activity (May)
• Thursday: Personal Income and Spending (Apr), Headline and Core PCE Price Indexes (Apr), Real Personal Spending (Apr), Durable Goods Orders (Apr preliminary), Initial Jobless Claims (May 23), Capital Goods Orders and Shipments (Apr preliminary), Continuing Claims (May 16), GDP Annualized (1Q second reading), Personal Consumption (1Q second reading), Core PCE Price Index (1Q second reading), New Home Sales (Apr), Building Permits (Apr final)
• Friday: Advance Goods Trade Balance (Apr), Retail Inventories (Apr), Wholesale Inventories (Apr preliminary), MNI Chicago PMI (May)