We all know the only constant in life is change. And the markets are not exempt from this fact of life as they constantly rise and fall. Markets fluctuate in response to many factors including interest rates, inflation data, political events, and international developments. So, should we be nervous that the markets have been trending upwards for a while now?
The S&P 500 wrapped up the month of May with a ninth consecutive weekly gain. The index has already recorded many all-time high closes this year. According to LPL Chief Equity Strategist Jeffrey Buchbinder, first-quarter S&P 500 earnings growth is currently tracking near 28% year over year.
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“Momentum indicators continue to confirm the bullish trend, although several measures are now approaching short-term overbought territory following the magnitude and speed of the advance.”
- Adam Turnquist, Chief Technical Strategist at LPL Financial
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The LPL Research team observes:
- A Technology Concentration: Mega cap technology and semiconductor-related names once again are carrying much of the market through major resistance levels. Semiconductor and memory-related stocks have experienced parabolic advances since the March lows. Momentum indicators continue to confirm the bullish trend, although several measures are now approaching short-term overbought territory following the magnitude and speed of the advance.
- Cautious Sentiment: Investor sentiment and positioning within the technology space have also become increasingly crowded from a contrarian perspective, leaving us somewhat cautious over the near term as the probability of consolidation or a pullback appears elevated.
Read the full article HERE.
In summary, the LPL Research team remains cautiously optimistic that the market still has some room to grow. At the same time, we will continue to keep a close eye on both the market and economy.
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Market Recap
May 2026 was an impressive month for the major indices and we saw across the board gains.
- The S&P 500 was up 5.15% for the month and reached a new all-time high of 7,580.06.
- The Nasdaq Composite Index posted a return of 8.36% for May.
- The Dow Jones Industrial Average (DJIA) rose 2.78% over the course of the month.
As always, if you have questions about how the economy may impact your investments, please don’t hesitate to reach out to us.
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Sources:
https://www.morningstar.com/indexes/spi/spx/performance
https://www.morningstar.com/indexes/dji/!dji/performance
https://www.morningstar.com/indexes/xnas/@cco/performance
https://www.lpl.com/research/blog/weekly-market-performance-may-29-2026.html
https://www.lpl.com/research/blog/technical-take-on-the-record-high-rally.html