Weekly Commentary (6/1/26) – Markets Extend Their Run as Earnings and Oil Both Matter
U.S. stocks posted a ninth straight week of gains last week, continuing a remarkable advance from the late-March lows. The rally has been supported by resilient earnings, still-solid domestic demand, and hopes that the Iran conflict may eventually de-escalate. At the same time, the market’s leadership remains relatively narrow, with AI-linked and adjacent infrastructure themes still doing much of the heavy lifting beneath the surface. That combination has helped push the major averages higher, but it also leaves the market vulnerable if the Iran conflict drags on and begins to weigh more meaningfully on margins, input costs, and earnings expectations.
Last week’s economic news was mixed but not alarming. The second estimate of first-quarter GDP was revised down to 1.6% from the initial 2.0%, but the underlying demand picture remained better than the headline suggested. Personal spending rose 0.5% in April, while core PCE, the Fed’s preferred inflation gauge, increased 0.2% on the month and 3.3% from a year earlier. Headline PCE, however, remained uncomfortably high at 3.8% year over year. In other words, growth has slowed some, but inflation and rates are still not behaving well enough to give the bond market or the Fed much lasting relief.
One support for the market continues to be earnings. Corporate profits have remained strong enough to justify at least part of the rally, and AI-related capital spending is still broadening beyond just the largest hyperscalers into suppliers, hardware, power, connectivity, and other infrastructure beneficiaries. Still, breadth remains narrower than the headline indexes suggest. That matters, especially in a midterm election year, because the second quarter has historically been a softer period and because a prolonged Iran conflict could begin to pressure corporate earnings more directly through energy, shipping, and input costs.
The coming week will give the market plenty to consider, including ISM manufacturing and services, job openings, productivity, the Beige Book, and Friday’s employment report. Investors will also continue to watch the Iran situation closely. For now, markets are acting as though the conflict can be contained and earnings can stay resilient. If either of those assumptions weakens, this long winning streak may be tested.
We continue to advise investors to be disciplined in adhering to their investment policy and patient when the markets’ winds are pushing against the planned course.
“The bamboo that bends is stronger than the oak that resists.” – Japanese proverb
Sources Market data: J.P. Morgan Asset Management, Weekly Market Recap, June 1, 2026. Index returns, yields, key rates, and commodity prices as cited in the Weekly Data Center. All equity returns represent total return for stated period. Oil and Gold: Wall Street Journal Markets Digest, June 1, 2026. Economic data: MarketWatch.com. Charts and portfolio data: YCharts.com.
NDS Wealth Advisors believes these sources are reliable but cannot guarantee the accuracy or completeness of third-party data and assumes no liability for errors or omissions.
Disclosures This material is for informational and educational purposes only and should not be relied upon as investment, legal, or tax advice, or a recommendation of any particular security, strategy, or investment product. Any economic forecasts or market outlooks expressed herein are forward-looking statements, subject to change without notice, and may not materialize. Investors cannot invest directly in an index. Index returns do not reflect the deduction of fees, commissions, or expenses, which would reduce overall performance. Past performance does not guarantee future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss. This material does not consider the investment objectives, financial situation, or unique needs of any individual investor. Consult your financial advisor before making any investment decisions.