This week's macro story: a narrow tech-led rally collided with sticky inflation, a Fed stuck on hold, and an oil market whipsawing on Iran headlines.
US equities hit new highs in May, with the S&P 500 up roughly 5% and the Nasdaq near 10% — but researchers flagged extreme concentration, noting two-thirds of index returns came from the top ten names and a gamma squeeze amplifying semis. A 9-week winning streak, analysts pointed out, historically precedes a 7–10% pullback.
On inflation, April core PCE rose to 3.3% YoY and headline to 3.8%, the hottest in years. Real disposable income turned negative, with consumers leaning on savings. Several Fed watchers argued cuts are off the table into H2 2027, and a contrarian thread even floated hikes if inflation stays sticky.
Long-end yields stayed elevated on fiscal concerns, with the 30-year near 5%. Oil eased on tentative Iran de-escalation hopes, though talks reportedly stalled late week. Abroad, BOE's Bailey stayed cautious, German CPI surprised lower, and China's PMI slipped to 50.