Jun. 1, 2026

If you like market momentum, the fifth month of 2026 was definitely for you! After a dramatic and welcome turnaround in April, U.S. equities extended their upward trajectory through May. Anchored by robust technology earnings and sustained artificial intelligence exuberance, the S&P 500® marched to eleven all-time closing highs and finished the month up 5%.

We will explain these market drivers—and how declining oil prices and easing geopolitical concerns amplified this positive sentiment.

While the broader market indices celebrated consecutive months in plus territory, the internal dynamics of May revealed a highly concentrated market environment. The "Great Rotation" into smaller companies that we highlighted earlier this year took a temporary breather, as mid- and small-cap equities lagged behind their large-cap peers.

The S&P MidCap 400® posted a modest gain of 2%, while the S&P SmallCap 600® rose just 1%. These segments faced distinct headwinds, weighed down by persistent inflation worries and climbing Treasury yields.

Sector performance remained heavily polarized as investors shifted their focus squarely back to previous leaders:

Information Technology Surge: The tech sector was the ultimate standout leader, surging an incredible 16% over the month—notably becoming the sole sector to outperform the broader S&P 500.

Energy Slump: In a sharp reversal of its strong first-quarter run, the Energy sector declined by 6% as global oil prices slumped.

From a factor perspective, Momentum, High Beta, and Growth retained their dominant spots at the top of the leaderboard. The outperformance of the S&P 500 Momentum index—heavily driven by the rally in mega-caps and tech—was particularly notable, bringing its year-to-date gains to an impressive 27%. Check the details in the upcoming Monthly Economic Update to see how these factors are influencing your portfolio's trajectory.

See this month's GRAnderson Wealth Management Economic Update for details.

Fixed income markets managed to provide a silver lining and delivered positive performance for the month. This resilience came despite longer-dated Treasury yields climbing toward multi-month highs, fueled by persistent inflation concerns and shifting expectations for Federal Reserve policy.

Commodity Mixed Bag

Geopolitical and economic shifts created a unique environment for hard assets:

• Industrial Metals: Industrial metals emerged as a bright spot within the complex, showing structural strength.
• Energy Retreat: Conversely, commodities declined broadly over the month, dragged down by severe losses for the energy sector as crude prices cooled.

Find details about these trends and other statistical categories in our latest Economic Update.

• S&P 500 Record Run: The S&P 500® finished May with a 5% gain, hitting eleven record closing highs along the way, propelled by strong tech earnings and AI enthusiasm.
• Small- and Mid-Caps Lag: Large-cap dominance left smaller companies behind; the S&P MidCap 400® rose 2% and the S&P SmallCap 600® crept up 1% amid inflation and yield pressures.
• Tech Dominance vs. Energy Drag: Information Technology surged 16% as the only sector to beat the S&P 500, while Energy slid 6% on slumping oil prices.
• Momentum Factor Leadership: Driven by mega-caps, the S&P 500 Momentum index continued its tear, hitting an impressive 27% gain year-to-date.
• Bonds Hold Ground: Fixed income indices posted positive returns for the month, even as longer-dated Treasury yields pushed toward multi-month highs.

Stay Disciplined. Stay Diversified.