| |
Market Indices | |
At-A-Glance | |
| |
May 2026 | |
U.S. stocks extended gains in May, with the S&P 500 ending the month with seven straight daily gains and its ninth consecutive weekly gain, its longest winning streak since late 2023. Strong corporate earnings, especially among AI Big Tech firms, along with optimism that a then pending ceasefire agreement were the primary drivers of the historic run of weekly gains. Gains were led by the tech-heavy Nasdaq Composite, advancing over 8.4% in May. Building on April’s 15.3% surge, the Nasdaq Composite recorded its strongest two-month return since November 2002 (+25.04%). Within the S&P 500, 14 member firms finished May at new all-time highs, 9 of them Technology firms. In benchmark Big Tech performance, the S&P 500’s Technology sector leapt nearly 16% in May after an 17.5% gain in April. The Philadelphia Stock Exchange Semiconductor Index, also known as SOX, is on track for its best quarterly performance on record after soaring 69% in the past two months. Semiconductor chip manufacturing is the best-performing sub-sector within the S&P 500. With the first quarter earnings season nearly complete, the year-over-year earnings growth rate for S&P 500 companies stands at 28.6%, well more than twice analysts’ original 13.1% consensus growth forecast, according to FactSet. If maintained, the index will register its highest earnings growth rate since the fourth quarter of 2021. In economic data, first quarter GDP was revised lower to +1.6% annualized growth from an initial +2.0% estimate, while remaining broadly higher from the +0.5% pace during the fourth quarter. Meanwhile, the Fed’s preferred measure of inflation, the core personal consumption expenditure (PCE) price index, increased 0.2% M/M in April, less than the +0.3% consensus forecast and slowed from +0.3% in March. On a year-over-year basis, core prices matched forecasts at 3.3% but ticked up from +3.2% in March. The ISM Manufacturing PMI surprised higher in May, climbing from 52.7 to 54.0, its highest level since May 2022 and surpassed economists’ forecasts for 53.1. Notably, the key New Orders component rose a fifth month to 56.8 from 54.1, while Prices Paid eased to 82.1 from 84.6 in April. Growth stocks of all sizes performed best in May, led by a 7.2% rally in Large Cap Growth. However, on a YTD basis, Small Cap stocks of all styles outperformed, with Small Cap Value performing best, up 18.3%. | |
 | |
Top & Bottom Performers | |
Only three sectors powered the S&P 500 higher in May, broadly dominated by Technology, followed by Consumer Discretionary and Health Care. Energy was the worst performing sector in May, down just over 5.5% during the month, following April’s 3% decline. Somewhat paradoxically, Energy retained its #1 top performer crown on a YTD basis, up 26%. Despite a hefty May pullback in oil prices, it still leaves U.S. crude oil up over 52% so far this year. | |
 | |
Global stocks, as measured by the MSCI All Country World Index, also performed well in May, climbing 5.16% to end at a new all-time high. The global index is up 12.15% YTD. Foreign equities in developed markets continued to trail the U.S. in May. The MSCI EAFE Index gained 3.07% last month, underperforming the S&P 500 by 2.2%. Emerging markets, however, continued to record exceptionally stronger results, advancing 9.69% in May. MSCI indices for Korea (+35.28%) and Taiwan (+16.53%) gained the most in May, and are now up 117.9% and 60.45% YTD, respectively. Turning to fixed-income markets, interest rates rose in May as the U.S.-Iran war kept oil prices volatile and inflation concerns were front and center. The April FOMC meeting minutes showed a majority of policymakers were prepared to raise rates if inflation failed to moderate, while economic data was mixed with employment holding up while consumer confidence slackened. For the month, two- and five-year U.S. Treasury yields rose around 0.13%, while longer-term 10- and 30-year rates climbed 0.07% and 0.01%, respectively. The yield on benchmark 10-year T-Notes ended May at 4.440%, up from 4.389% in April. The Bloomberg U.S. Government Index rose 0.11% in May while the longer-duration Bloomberg U.S. Government Long-term Bonds Index advanced 0.51%. On a broader basis, investment-grade bonds of all types, as measured by the Bloomberg U.S. Aggregate Bond Index, rose 0.31% last month, while Bloomberg’s U.S. Corporate High Yield Bond Index, representing holdings of below investment-grade (junk-rated) bonds, slightly outperformed with May gains of 0.49%. Bloomberg’s U.S. Municipal Bond Index rose 0.37%. | |
 | |
This report is created by Cetera Investment Management LLC. For more insights and information from the team, follow @CeteraIM on X. |
About Cetera® Investment Management
Cetera Investment Management LLC (CIM) is a Securities and Exchange Commission registered investment adviser owned by Cetera Financial Group® (CFG). CIM provides market perspectives, portfolio guidance, model management, and other investment advice to its affiliated broker-dealers and registered investment advisers.
About Cetera Financial Group
“Cetera Financial Group” (CFG) refers to the network of independent retail firms encompassing, among others, those that are members FINRA/SIPC; Cetera Advisors LLC, Cetera Wealth Services, LLC (f/k/a Cetera Advisor Networks), Cetera Investment Services LLC (marketed as Cetera Financial Institutions or Cetera Investors), and Cetera Financial Specialists LLC. Those that are Securities and Exchange Commission registered investment advisers; Cetera Investment Management LLC and Cetera Investment Advisers LLC, .CFG is located at 655 W. Broadway, 11th Floor, San Diego, CA 92101.
Avantax Planning Partners, Inc. is an SEC registered investment adviser within the Aretec Group, Inc. (dba Cetera Holdings). All of the referenced entities are under common ownership
Disclosures
Advisory services may only be offered by investment adviser representatives in connection with an appropriate Advisory Services Agreement and disclosure brochure.
The material contained in this document was authored by and is the property of CIM. CIM provides investment management and advisory services to a number of programs sponsored by affiliated and non-affiliated registered investment advisers. Your registered representative and/or investment adviser representative is not registered with CIM and did not take part in the creation of this material. They may not be able to offer CIM portfolio management services.
Nothing in this presentation should be construed as offering or disseminating specific advice to any individual without the benefit of direct and specific consultation with a financial professional. Information contained herein shall not constitute an offer or a solicitation of any services. Past performance is not a guarantee of future results.
For more information about CIM, please reference the CIM Form ADV 2A and the applicable ADV 2A for the registered investment adviser your financial professional is registered with. Please consult with your financial professional for their specific firm registrations and available program offerings.
No independent analysis has been performed and the material should not be construed as investment advice. Investment decisions should not be based on this material since the information contained here is a singular update, and prudent investment decisions require the analysis of a much broader collection of facts and context. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The opinions expressed are as of the date published and may change without notice. Any forward-looking statements are based on assumptions, may not materialize, and are subject to revision.
All economic and performance information is historical and not indicative of future results. The market indices discussed are not actively managed. Investors cannot directly invest in unmanaged indices. Please consult your financial professional for more information.
Additional risks are associated with international investing, such as currency fluctuations, political and economic instability, and differences in accounting standards. A diversified portfolio does not assure a profit or protect against loss.
Glossary
The Bloomberg Barclays Capital U.S. Aggregate Bond Index, is a broad based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government–related and corporate debt securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency) debt securities that are rated at least Baa3 by Moody’s and BBB- by S&P. Taxable municipals, including Build America bonds and a small amount of foreign bonds traded in U.S. markets are also included.
The Bloomberg Barclays US Municipal Bond Index covers the USD-denominated long-term tax exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and prerefunded bonds. Eligible securities must be rated investment grade (Baa3/BBB- or higher) by Moody’s and S&P and have at least one year until final maturity, but in practice the index holding have a fluctuating average life of around 12.8 years.
The Bloomberg Barclays US Corporate High Yield Index measures the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below, excluding emerging market debt. Payment-in-kind and bonds with predetermined step-up coupon provisions are also included. Eligible securities must have at least one year until final maturity, but in practice the index holdings has a fluctuating average life of around 6.3 years.
The Barclays U.S. Government Bond Index is comprised of the U.S. Treasury and U.S. Agency Indices. The index includes U.S. dollar-denominated, fixed-rate, nominal US Treasuries and US agency debentures (securities issued by US government owned or government sponsored entities, and debt explicitly guaranteed by the US government).
The Bloomberg Commodity Index is a broadly diversified index that allows investors to track commodity futures through a single, simple measure. It is composed of futures contracts on physical commodities and is designed to minimize concentration in any one commodity or sector. It currently includes 19 commodity futures in five groups. No one commodity can comprise less than 2% or more than 15% of the index, and no group can represent more than 33% of the index (as of the annual reweightings of the components).
The Cboe Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices.
The MSCI EAFE is designed to measure the equity market performance of developed markets (Europe, Australasia, Far East) excluding the U.S. and Canada. The Index is market-capitalization weighted.
The MSCI Emerging Markets is designed to measure equity market performance in global emerging markets. It is a float-adjusted market capitalization index.
The MSCI All-Country World Index (ACWI) is a market cap weighted index designed to represent performance of the full opportunity set of large- and mid-cap stocks across 23 developed and 26 emerging markets, covering more than 2,700 companies across 11 sectors and approximately 85% of the free float-adjusted market capitalization in each market.
The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower forecasted growth values.
The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe and is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.
The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe and is a subset of the Russell 1000 Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap represents approximately 31% of the total market capitalization of the Russell 1000 companies.
The S&P BSE SENSEX Index is a free-float market-weighted index of 30 well-established and financially sound stocks on the Bombay Stock Exchange, representative of various industrial sectors of the Indian economy.
The S&P 500 is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ.
The NASDAQ Composite Index includes all domestic and international based common type stocks listed on The NASDAQ Stock Market. The NASDAQ Composite Index is a broad-based capitalization-weighted index.
The Shanghai Composite Index is a stock market index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange.
The U.S. Dollar Index is a weighted geometric mean that provides a value measure of the United States dollar relative to a basket of major foreign currencies. The index, often carrying a USDX or DXY moniker, started in March 1973, beginning with a value of the U.S. Dollar Index at 100.000. It has since reached a February 1985 high of 164.720, and has been as low as 70.698 in March 2008.
West Texas Intermediate (WTI) is a crude oil stream produced in Texas and southern Oklahoma which serves as a reference or "marker" for pricing a number of other crude streams. WTI is the underlying commodity of the New York Mercantile Exchange's oil futures contracts.