Market View: Week of May 22, 2026
ECONOMIC REVIEW¹
U.S. pending home sales increased 1.4% month-over-month (MoM) in April, following an upwardly revised 1.7% gain in March and surpassing market expectations of 1%.
U. S. building permits jumped 5.8% MoM to a seasonally adjusted annual rate of 1.442 million in April, rebounding from a seven-month low of 1.363 million in March and exceeding market expectations of 1.39 million.
Multi-family permits, including buildings with five or more units, surged 21.8% to 570,000, while single-family permits declined 2.6% to 872,000.
U.S. housing starts were down 2.8% MoM to a seasonally adjusted annual rate of 1.465 million in April, compared to an upwardly revised 1.507 million in March, which was the highest level since December 2024 and above forecasts of 1.41 million.
Single-family starts were down 9% to 0.93 million, while multi-family starts rose 14.3% to 0.529 million.
Initial jobless claims in the U.S. fell by 3,000 to 209,000 in the second week of May, which aligned with market expectations of 210,000.
Continuing jobless claims rose by 6,000 to 1,782,000, slightly below expectations of 1,790,000.
The University of Michigan’s Consumer Sentiment Index plunged to a record low of 44.8 in May, marking the third straight monthly decline, as disruptions in the Strait of Hormuz continued to push gasoline prices higher.
Minutes from the April Federal Reserve (Fed) meeting showed most Fed officials have grown concerned with persistent inflation and believe additional rate hikes could be necessary if inflation remains meaningfully above the Fed’s 2% target.
At the same time, several officials noted they would still support rate cuts if inflation resumes its previous decline or if the labor market begins to weaken meaningfully.
How does the most recent economic data impact you?
Higher mortgage rates and continued economic uncertainty stemming from the Iran conflict have created a difficult environment for the housing market.
One key, ongoing issue is the lack of housing supply, which has kept prices elevated for the few homes that do come to market, decreasing overall affordability and ultimately demand.
The labor market continues to show resilience, allowing the Fed some leeway to remain restrictive and focused on the other half of its dual mandate – inflation.
A LOOK FORWARD¹
This week, investors will be monitoring inflation data from the PCE Price Index and economic growth estimates from the second revision of Q1 GDP.
How does this week’s slate of economic data impact you?
This week’s data will provide insight into how the ongoing war in the Middle East has impacted inflation and GDP growth within the US.
MARKET UPDATE²
| Market Index Returns as of 5/22/26 | WTD | QTD | YTD | 1 YR | 3 YR | 5 YR |
|---|---|---|---|---|---|---|
| S&P 500 | 0.91% | 14.66% | 9.69% | 30.37% | 23.37% | 14.09% |
| NASDAQ | 0.48% | 22.12% | 13.62% | 41.46% | 28.89% | 15.20% |
| Dow Jones Industrial Average | 2.18% | 9.39% | 5.89% | 23.63% | 17.35% | 10.22% |
| Russell Mid-Cap | 2.16% | 8.94% | 10.35% | 22.49% | 17.49% | 8.22% |
| Russell 2000 (Small Cap) | 2.75% | 15.08% | 16.10% | 42.46% | 18.72% | 6.75% |
| MSCI EAFE (International) | 2.17% | 9.58% | 8.22% | 22.58% | 16.30% | 8.75% |
| MSCI Emerging Markets | 1.11% | 21.03% | 20.83% | 46.78% | 22.72% | 7.46% |
| Bloomberg US Agg Bond | 0.26% | -0.40% | -0.45% | 5.18% | 3.85% | 0.08% |
| Bloomberg High Yield Corp. | 0.25% | 1.63% | 1.13% | 7.77% | 9.11% | 4.35% |
| Bloomberg Global Agg | 0.31% | 0.58% | -0.50% | 2.77% | 3.31% | -1.69% |
OBSERVATIONS
Equity indices bounced back from broadly negative performance the week prior, primarily fueled by optimism around Artificial Intelligence (AI) and the potential that the U.S. could strike a deal with Iran.
The S&P 500 (+0.91%) posted its eighth weekly gain in a row, with the NASDAQ (+0.48%) also seeing gains, while the Dow (+2.18%) notched an all-time high.
Small-Cap stocks (+2.75%) led the rally, with Mid-Cap stocks (+2.16%) not far behind.
International developed markets (+2.17%) and emerging markets (+1.11%) also saw strong performance.
Treasury yields continued to climb early in the week before reports that the U.S. was in the final stages of negotiations with Iran pushed yields off recent highs, though they remain elevated.
International bonds (+0.31%) led the week, with similar gains domestically (+0.26%) and across the credit spectrum (+0.25%).
BY THE NUMBERS
Summer Jobs Become Harder to Land for Teens:
This summer’s teen job market is shaping up to be one of the toughest in decades, with some data suggesting potentially the weakest summer hiring season for teens since government tracking began in 1948. Teen unemployment is currently sitting at 14.4%, far above the national unemployment rate of 4.3%, while labor force participation for 16–19-year-olds has fallen to 35.8%, down from a post-pandemic peak of 38%. Inflation and rising fuel costs are pressuring the small businesses that traditionally hire teens, including restaurants, retailers, amusement parks, and summer camps. Adding to the weakness, employers in the entertainment and leisure sector, a major source of jobs for young workers, are expected to fill 70% fewer roles than last year. Still, there are a few bright spots, particularly in retail hiring, which has shown growth.³
Knicks End NBA Finals Drought after Demolishing Cavaliers to Complete Sweep:
The New York Knicks are headed to the NBA Finals for the first time since 1999 after demolishing the Cleveland Cavaliers 130-93 to complete a stunning four-game sweep. Led by Jalen Brunson and Karl-Anthony Towns, the Knicks overwhelmed Cleveland with dominant defense, rebounding, and three-point shooting, extending their playoff winning streak to 11 games. The victory sparked massive celebrations across New York City as fans and celebrities flooded the streets to celebrate the franchise’s first Finals appearance in 27 years.⁴
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1 Data obtained from Bloomberg as of 5/22/26.
2 Data obtained from Morningstar as of 5/22/26.
3 This summer’s teen job market is the toughest in decades
4 Knicks end NBA Finals drought after demolishing Cavaliers to complete sweep
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