Market Review: May 20, 2026

Closing Recap

Wednesday, May 20, 2026

U.S. stocks closed at the highs in a strong showing, as the Dow Jones Industrial Average finished around 50K, while the S&P 500 and Nasdaq recouped much of their losses the last 3 days amid a broad based rally led by Technology (XLK) Industrials (XLI) and Materials (XLB), three of the top S&P sectors of the year, and Consumer Discretionary (XLY +2.5% today), while Energy (XLE) was the big laggard, falling over -2.4% but remains the top gainer on the year (+33% YTD). Market enthusiasm ahead of Nvidia (NVDA) earnings tonight was clear, with chip stocks seeing big bounces after a rare recent slide, as the Philly semi SOX index rose around 4.5%. Oil prices tumbled over 5% and Treasury yields sunk after a 6-week run, also providing support for investors. Smallcaps were among the biggest beneficiaries today or the lower yields (IWM was up over 2.5%), along with housing stocks and mortgage related names after the 10-yr yield jumped 70 bps since the start of the Iran war. After tech digests the NVDA earnings results tonight, markets get the world largest retailer earnings tomorrow in Wal-Mart (WMT) and Industrial machinery giant Deere (DE) earnings as well.

It seemed nothing could dent todays excitement as minutes of the Federal Reserve’s April meeting showed officials warned the Iran war could fuel inflation, boosting support for a possible rate hike, with most policymakers saying tightening may be needed if inflation remains above the 2% target. @Bluekurtic noted on X, “S&P 500 is now positive for the week and could mark its 8th straight weekly gain, only the 20th time since 1950. This kind of momentum has rarely been followed by large drawdowns. In all 19 prior cases, the next 3 month max drawdown stayed below 10%. Every single time.” Still just mid-week, but does NVDA keep the Bull rally alive?

President Donald Trump said that negotiations with Iran were in the final stages, while warning of further attacks unless Iran agrees to a deal, according to Reuters. “We’re in the final stages of Iran. We’ll see what happens. Either have a deal or we’re going to do some things that are a little bit nasty, but hopefully that won’t happen,” Reuters quotes the President as having told reporters on Wednesday. “We’re going to give this one shot. I‘m in no hurry. Ideally I‘d like to see few people killed, as opposed to a lot. We can do it either way,” Trump is said to have added.

IPO fever really picking up with some of the most highly anticipated IPOs in history are potentially coming in the next few months, following the massive semi chip related Cerebras (CBRS) hot IPO last week that opened at $345 after pricing 30M shares at $185. The other day, SpaceX (SPCX) announced it picked Nasdaq as listing venue for its initial public offering (IPO) and its initial public offering could be as early as June 11, set to list shares on June 12. Then today, the WSJ reported ChatGPT-maker OpenAI has been working with Bankers to prepare to file for an initial public offering in the coming days or weeks. Bankers at firms including Goldman Sachs and Morgan Stanley have been helping the artificial-intelligence giant on a draft IPO prospectus it plans to file confidentially with regulators soon, possibly as early as Friday.

Even hawkish Fed headlines couldn’t dent optimism today: FOMC Minutes showed Federal Reserve officials’ concerns about inflation being stoked by the Iran war intensified last month, with a growing number of them saying the Central bank should lay the groundwork for a possible rate hike, a sign that incoming Chair Kevin Warsh will inherit an increasingly hawkish crew of Central Bankers. Moreover, a majority of Fed policymakers at their April 28-29 meeting said some policy tightening may be needed were inflation to continue running persistently above the Central bank’s 2% target. Investors are now pricing in a 48.6% chance the Federal Reserve could raise rates in December, and an 89.6% chance it maintains current rates at its next meeting in June, according to CME‘s FedWatch tool.

• After a massive surge in Treasury yields the last few weeks, raising inflation concerns, Yields today moved lower following a selloff in the previous session, as uncertainty persisted around the war with Iran and the path of inflation. The yield on the benchmark 10-year Treasury note was last down 10 basis points on the day at 4.56% after reaching its highest level since January 2025 on Tuesday, surging to 4.687%. The 30-year Treasury bond’s yield was down roughly 6.6 bp at 5.114%. It briefly touched 5.197% this week, its highest since July 2007.The shorter term 2-yr yield fell 8.5bps to 4.037%, off higher of 4.122% yesterday.
• June gold settles +$24.10/oz, or +0.53%, at $4,535.30 an ounce, while July Silver settles +$1.02/oz, or +1.36%, at $76.18 an ounce as hopes for a resolution to the Iran conflict pressured oil markets, relieving some inflation fears and knocking U.S. Treasury yields from their recent highs.

• Apparel Retail: VFC Q4 revenue of $2.17B topped estimates of $2.13B helped by strong demand in Americas region, reports annual revenue growth of 4% excluding contributions from Dickies brand, which it sold in late 2025, marking the first revenue growth following three years of decline.
• Off Price Retail: TJX reported Q1 top and bottom line above consensus at $1.19/$14.3B vs. consensus $1.00/$140.01B; and Q2 guidance was in-line with consensus while raises year outlook for FY27 comp store sales growth between 3%-4% (vs. prior 2%-3%) and EPS $5.08-$5.15, above prior view $4.93-$5.02.
• Specialty Retail: WRBY weakness from Tuesday discussed by Roth Capital saying the Google Io event from 5/19 included some modest new details around Warby’s Smart glasses product, with the most important one being timing: available "this fall." While this was essentially in line with Roth’s expectations, it may have been disappointing for some Smart glasses bulls, as WRBY stock was -11% on the day (vs. R2K -1%).

• Homebuilders: TOL Q2 results topped consensus as EPS $2.72 vs est $2.58, on home sales revenue $2.51B vs est $2.415B; Q2 adj home sales gross margin 26.2 raises full-year guidance across all key home building metrics as expects FY 2026 deliveries of 10,400-10,700 units, avg price $985,000-$1,000,000.
• Mortgage industry: ZG asked a court to stop real estate brokerage COMP from working with a Chicago-area multiple listing service to block access to home listings after Zillow established new rules around private listings on its site

• Utility/Power stocks CEG, VST, CEG, NNE, NG, OKLO, SMR, TLN and many others saw notable gains after PJM (the large regional grid operator covering much of the Mid-Atlantic and Midwest) faces explosive electricity demand growth, mainly from data centers/AI loads, alongside generator retirements. This has caused tight capacity margins and record-high prices in recent auctions. Due to the needed energy, PJM yesterday merged the "Reliability Backstop" (emergency procurement of new capacity) with "Connect & Manage" (C&M) processes for new large loads. This streamlines timelines that were previously separate. Accelerates the centralized procurement to September 2026 (instead of waiting until 2027) to cover shortfalls from the upcoming Base Residual Auction. It still allows bilateral deals first between willing buyers (data centers) and sellers (generators).
• In Solar and Alternative Energy: TE shares rebounded around 30% a day after shares dropped after Fuzzy Panda Research disclosed a short position in the company. Two factors helping shares today as Hedge fund Situational Awareness LP, in a filing on Tuesday, reported a $43 million stake in the T1 Energy. The fund is run by former OpenAI researcher Leopold Aschenbrenner. Also, Roth Capital defended shares off the Fuzzy Panda report saying they believe TE is currently FEOC-compliant, fully transparent, and a model for what the Trump administration may want in a domestic manufacturer that is transferring advanced technology capacity to the US.

• FinTech: Fintech startup Mercury raised $200M at a $5.2B valuation, up 49% from its last round 14 months ago. The company has 300K+ customers, including one-third of early-stage U.S. startups, $650M in annualized revenue and four straight years of profitability.
• Banks: MS and GS saw outperformance in generally strong day for financials; both being helped by recent headlines that the two are among the top banks headlining underwriting in upcoming SpaceX and OpenAI IPOS.

• IBRX said the FDA accepted for review the supplemental Biologics license application to expand the label for Anktiva in battling invasive bladder cancer
• IMVT and ROIV shares both surged after preliminary results from IMVT-1402 Trial in D2T RA. At the completion of Period 1, 165 of the 170 patients were evaluable for ACR20 response. Of these patients, 86.7% (143/165) had failed two prior mechanisms of advanced therapies, and the mean time since diagnosis was 12.8 years.
• PFE announced data from its Phase 2 study evaluating the safety, tolerability and immunogenicity of a four-dose series of its investigational 25-valent pneumococcal conjugate vaccine candidate PF-07872412 in infants compared to four doses of PREVNAR 20 at months 2, 4, 6 and 12-15.
• PSNL announced that the Centers for Medicare & Medicaid Services’ (CMS) Molecular Diagnostic Services Program (MolDX) has expanded coverage for the company’s NeXT Personal minimal residual disease (MRD) test.
• RLAY announces underwritten public offering of $175M of common stock

• In Aerospace: GS is said to have the leading role on the cover of SpaceX’s (SPCX) IPO, with MS also listed as a lead bank. SpaceX expects to proceed with its acquisition of Cursor 30 days after the company begins trading publicly, and if the deal doesn’t go through, SpaceX would pay Cursor a $10 billion breakup fee in cash – Bloomberg. VOYG awarded a subcontract by RDW, the prime contractor for the DARPA Otter program, to supply its high-precision Acceleration Measurement System
• In Paper & Packaging: PKG was upgraded to Buy from Neutral at UBS as they expect the $50/ton June price hike to stick amid improving demand and tight supply. High utilization and prior capacity cuts (10% of industry) support pricing power, potentially adding ~$290M in annualized EBITDA (half in 2026).

• Components & Equipment: KEYS 2Q revenue/non-GAAP EPS of $1.7B/$2.87, 1% above/$0.55 above the Street and non-GAAP EBIT margin was ~33.3%, above both the Street at 27.4%; Q2 orders were $2,051MM (up 25% q/q and up 56% y/y and guided Q3 revs and EPS to ~$1.74B/$2.46 at the midpoint, 5% above/$0.30 above the Street.
• Software: ADBE, CRM, HUBS, MNDY, TEAM, WDAY resumed downward pressure early amid rotation back into semis – software names (IGV) had enjoyed three days rally while semis pulled back from highs; RBRK was upgraded to Outperform (from Perform) at Oppenheimer as believes: (1) Rubrik is benefitting from a sharp recovery in backup & recovery/cyber-resilience sector demand; (2) its product leadership across various workloads continues to improve; and (3) given Rubrik protects mission-critical workloads, higher memory pricing doesn’t seem to be impacting demand, at least for now.
• Communications & Networking: VIAV shares dropped after announces pricing of 11.11M share offering at $45.00. RDDT shares tumbled  after GOOGL headlines updating its Ai Search features to make it easier for users to find information (Google Search is changing after 25 years, you may not see Blue links anymore). At Google I/o 2026, Google announced massive Ai-powered upgrades to Search, introducing Ai agents, conversational answers, custom mini apps and personalized Intelligence powered by Gemini 3.5 Flash.

• CPU chip makers ARM, INTC, NVDA all outperformed – Bank America noted today they update server CPU TAM to $125B from $110B, +31% CAGR, analyze oppty across: INTC, AMD, and ARM – said views agentic CPUs as additive to total TAM, not cannibalistic and CPUs now 6% of DC TAM vs 5% prior, still relatively modest.
• ADI Q2 revs 3% better than street and slightly street with GMs 73% vs street at 72.2%. July Q guided 8% q/q growth at midpoint vs and implied GMs 73%, 150bps above street. Strength driven by Autos, Industrials slightly missed
• ASML CEO said he had contact with Elon Musk about the Terafab project that aims to build chips for SpaceX, xAI and Tesla, Reuters reports following an interview on the sidelines of a tech event in Antwerp, Belgium.
• Memory chip makers MU, SNDK saw gains early on reports Samsung (SSNLF) union set to strike on Thursday, as approximately 48,000 workers are scheduled to begin an 18-day strike over bonus payments, posing a potential risk to South Korea’s economy and global chip supply (and possibly raise memory costs). Media reports later noted Samsung Electronics and its South Korean labor union reached a preliminary pay deal on Wednesday, potentially averting a planned lengthy strike that threatened to disrupt the production of AI and other chips.