May 20, 2026

The week started with the S&P 500 shedding a few points despite over 70% of members gaining ground. Mixed signals on the Middle East remain in focus on reports that the White House called off attack plans, although both sides were said to have rejected fresh deal offers. An unwind of recently red-hot momentum trades across the tech space has crept into focus over the last few days, broadly due to technical dynamics, as market chatter around fundamentals remains intact ahead of NVIDIA (NVDA) earnings on Wednesday. 

Topics of the week: 

  • Consumer Spending Remains Resilient Overall: Retail sales continue to grow, supported in part by higher-income consumers maintaining strong discretionary activity. This ongoing demand helps sustain economic momentum even as some households face pressure.

  • Tariff-Related Inflation Pressures Are Easing: The report indicates that tariff impacts were largely front-loaded and are now fading as businesses adapt. This reduces one source of inflation uncertainty going forward. 

What we are watching:

  • Consumers Are Becoming More Financially Vulnerable: The savings rate remains well below historical norms, leaving households with thinner financial cushions. This increases risk if economic conditions weaken or borrowing costs stay elevated.

  • Increased Reliance on Credit Reflects Underlying Strain: Lower- and middle-income households are increasingly using credit to manage higher living costs. High interest rates on credit cards make this trend potentially unsustainable over time.

 

Index Data & Market Performance 

 

Data as of Market Close  5.18.26 

source: gemini.google.com*

In Focus

The primary market reports driving investor focus this week are the FOMC Minutes, S&P Global Flash PMIs, and a wave of critical housing data. Investors are highly focused on policy clues following the official transition of Kevin Warsh as Federal Reserve Chair.

Monday - Home Builder Confidence (May)

Tuesday – Pending Home Sales (April), Fed Insight

Wednesday – FOMC Minutes, NVIDIA (NVDA) Earnings

Thursday – Initial Jobless Claims, Housing Starts & Building Permits

Friday – Consumer Sentiment

 

What's Trending: Energy Shock 

What a Drag

The Middle East war is expected to exert a modest but meaningful drag on near-term growth through renewed supply chain disruptions, higher shipping costs, and increased uncertainty around energy and trade flows. Our forecast assumes these disruptions subtract 0.2 percentage points from second quarter real gross domestic product (GDP) growth, reflecting delayed shipments, higher input costs, and a cautious inventory response from firms. 

Business Investment Added 1.39 Percentage Points to the 2% Headline Growth

Non-residential fixed investment was a key support to first quarter growth, helping offset softer contributions from other parts of the economy and contributing roughly 1.4 points to headline growth. The strength largely reflected solid business spending on equipment, intellectual property products, and structures, suggesting firms remained willing to invest despite elevated financing costs and policy uncertainty. This matters because non-residential investment feeds directly into the real economy. 

In sum, business investment in tech equipment continues to boost growth. This category alone contributed 0.83 percentage points, close to the near-term record for last year. 

 

 

 

 

 

Disclosures

*The data for the total returns of the S&P 500, Dow Jones 30, and NASDAQ Composite are compiled and published by several financial news outlets, index providers, and government/academic sources.

Based on typical financial data providers and the search results, here are the likely sources for this data:

  • S&P Dow Jones Indices (S&P Global): This is the official index calculator for the S&P 500 and the Dow Jones Industrial Average (DJIA). They publish index data, including total returns, in daily, weekly, and monthly reports/commentary.
  • Nasdaq Global Indexes: They are the official index calculator for the NASDAQ Composite. They also publish fact sheets and performance reports with total return data.
  • Financial News Agencies and Publications: News outlets like The Associated Press (AP) and financial publications like Investopedia regularly report on the daily, weekly, and year-to-date (YTD) returns of these major U.S. indexes.
  • Federal Reserve Economic Data (FRED) / St. Louis Fed: FRED, maintained by the Federal Reserve Bank of St. Louis, is a public resource that often includes daily closing levels for indices like the S&P 500, which can be used to calculate returns.
  • Financial Data Platforms (e.g., Bloomberg, YCharts, MSCI): Professional and commercial financial data providers often republish or calculate returns based on the official index data for their clients.