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Week In Review

Week In Review

May 30, 2026

Economy

An important measurement of inflation hit a nearly three year high last month. The Fed's preferred gauge for inflation, core personal consumption expenditures (PCE) clocked in at 3.29%, the highest level since October 2023. The stated goal for the Fed is to maintain core inflation at 2%. A year ago, core PCE was at 2.6%, and we've clearly been trending in the wrong direction on that front. The medicine for higher inflation as prescribed by the Fed is usually higher interest rates. Markets are currently bracing for the Fed to raise rates by the end of the year with the probabilityof at least one rate hike at about 50%.

Markets

Even though the trading week was shortened by a holiday, it counts all the same. The S&P 500 notched a ninth straight week of gains, closing Friday at an all-time high. For the week the index rose 1.43% as the markets look for the Iran war to continue to wind down leading to lower oil prices, one less object of friction in the way of higher stock prices. Gains continue to be fairly distributed with the equal-weight S&P 500 index also closing at all-time highs.

There's a lot of momentum behind the stock market at this point, and while we don't base our investment philosophies on a single factor like momentum, it can provide some valuable insights into the psychology behind the markets. The table below, courtesy of Ryan Detrick at Carson Group, shows that in the past, when the S&P 500 is up by 10% or more through the first 100 days of the year, the rest of the year has historically been (mostly) positive with a median "rest of year" return of 11%. Could 2026 be one of the only years to turn in a negative number from here on out? Of course it could. But for now, it seems like the music is still playing and there's a lot of people left on the dance floor.

What We're Reading

Have a great weekend.


Dogwood Wealth Management