U.S. equities continued their upward momentum last week, with technology stocks once again leading the advance, supported by encouraging corporate earnings results and ongoing enthusiasm surrounding artificial intelligence developments. Furthermore, investor sentiment also benefited from reports that the United States and Iran agreed to extend their ceasefire for an additional 60 days, which helped ease geopolitical concerns and lower oil prices. As a result, for the week, the NASDAQ gained 2.4%, the S&P 500 rose 1.4%, and the Dow Jones Industrial Average added 0.9%. This strong performance capped a solid month, with the NASDAQ advancing 8.4% in May, the S&P 500 climbing 5.1%, and the Dow increasing 2.8%. Moreover, economic growth remains resilient, supported by healthy consumer spending and robust business investment, particularly in AI-related initiatives that continue to provide a meaningful boost to overall economic activity. Finally, the benchmark 10-year U.S. Treasury yield fell from around 4.56% at the end of the prior week to 4.47%.

U.S. & Global Economy

• Economic data released last week painted a mixed picture of the U.S. economy. Inflation remained elevated, with the Federal Reserve’s preferred inflation measure, the PCE index, showing annual price pressures continuing to run above the Fed’s target, while consumer spending remained solid despite relatively flat income growth. Several Federal Reserve officials maintained a cautious stance, emphasizing that inflation risks persist and indicating that interest rate cuts may be delayed if price pressures fail to ease. Meanwhile, first-quarter economic growth was revised modestly lower, reflecting softer consumer spending and business investment, although growth remained stronger than the previous quarter. On a more positive note, durable goods orders posted a strong increase, highlighting continued demand across parts of the manufacturing sector. We are encouraged that weekly jobless claims remain at relatively low levels, suggesting the labor market continues to hold up well; however, we remain attentive to a growing number of workforce reduction announcements from several large technology companies, which could warrant closer monitoring if the trend persists.

Policy and Politics

• On the Iran front, U.S. and Iranian negotiators reached a tentative 60-day memorandum of understanding to extend the ceasefire and begin new nuclear talks, although President Trump has not yet given final approval. However, key sticking points remain, including Iran’s enriched uranium stockpile and the broader issue of uranium enrichment. Vice President Vance said he feels “pretty good” about the progress being made but stopped short of guaranteeing a final agreement. Turning to trade, Treasury Secretary Bessent indicated that the U.S. is “not in a rush” to extend its tariff truce with China, which is set to expire in November. He described the relationship as “stable,” noting that China’s compliance with its commitments on critical minerals has been satisfactory, though not exceptional. In Ukraine, Russian forces have experienced a net loss of roughly 100 square miles of territory over the past four weeks, marking a notable reversal from gains earlier this year. Regarding Cuba, the Trump administration expanded its sanctions framework this month to allow for the targeting of foreign companies and individuals conducting business with the island. This structure is like existing sanctions on Iran and Russia and follows reports that Cuba has acquired more than 300 military drones and discussed potential plans involving U.S. targets.

As investors look ahead to the coming week, attention will shift from earnings season to key economic data and geopolitical developments. With roughly 97% of S&P 500 companies having reported first-quarter results, corporate earnings have generally exceeded expectations, with both the percentage of companies delivering positive surprises and the magnitude of those surprises running above historical averages. The index is also on track to post its strongest year-over-year earnings growth since the fourth quarter of 2021, with ten of eleven sectors reporting earnings growth and seven sectors achieving double-digit gains, led by Information Technology, Communication Services, Materials, and Consumer Discretionary companies. This week, the primary focus will be Friday’s employment report, which investors will closely monitor for signs of labor market strength or weaknesses that could influence the Federal Reserve’s policy outlook. We will also be paying close attention to developments surrounding the U.S.-Iran ceasefire, as any deterioration in negotiations or renewed conflict could impact energy markets and introduce additional volatility through higher oil prices. Please contact your partners at Valley National Financial Advisors with any questions.

Economic Numbers to Watch This Week

• U.S. ISM Manufacturing Index for May 2026, prior 52.7%
• U.S. Construction Spending for April 2026, prior 0.6%
• U.S. Job Openings (JOLTS) for April 2026, prior 6.9 million
• U.S. ADP Employment Change for May 2026, prior 109,000
• U.S. Factory Orders for April 2026, prior 1.5%
• U.S. ISM Services Index for May 2026, prior 53.6%
• U.S. Initial Jobless Claims for May 30, 2026, prior 215,000
• U.S. Nonfarm Payrolls for May 2026, prior 115,000
• U.S. Unemployment Rate for May 2026, prior 4.3%
• U.S. Average Hourly Earnings for May 2026, prior 0.2%

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