Stocks bounced back last week as enthusiasm for the AI trade continued and rumors of a Middle East peace agreement bolstered investor optimism.
The Standard & Poor’s 500 Index advanced 0.88 percent, while the Nasdaq Composite Index edged ahead 0.45 percent. The Dow Jones Industrial Average climbed 2.13 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 2.16 percent.1,2
S&P 500’s 8th Winning Week
Stocks sputtered out of the gate as a capacity issue amid soaring demand in the memory chip space put pressure on those stocks, along with the AI trade and tech more broadly.3
Then markets took a leg up midweek as investor optimism returned for a Middle East peace deal; oil prices and Treasury yields fell. Investors also looked ahead to a quarterly earnings report from one of the megacap AI chipmakers. The Dow hit a fresh record close.4,5
Then, on Friday, markets rallied once again as investors continued to hold out hope that a Middle East peace deal would materialize.
Kevin Warsh was sworn in as the new Fed chair, while investor enthusiasm over the AI trade and other tech stocks added to the market’s ebullient sentiment. The Dow closed at another record high, while the S&P 500 finished its eighth consecutive week in the green, its longest weekly winning streak since 2023.6
Footnotes And Sources
1. WSJ.com, May 22, 2026
2. Investing.com, May 22, 2026
3. CNBC.com, May 18, 2026
4. CNBC.com, May 20, 2026
5. CNBC.com, May 21, 2026
6. WSJ.com, May 22, 2026
