May Market Wrap: AI Stocks Lead, Oil Volatile, Dollar Supported
Key Takeaways
-Nasdaq and S&P 500 pushed to record highs, led by AI and tech earnings.
-USD strengthened as strong US data reduced near-term Fed cut expectations.
-Gold and silver lost momentum amid higher yields and a firmer dollar.
-Oil stayed volatile with US-Iran negotiations driving the supply-risk premium.
-Bitcoin entered a corrective phase after early May gains, reflecting tighter financial conditions.
May maintained a risk-on tone, with US equities continuing to outperform. The Nasdaq and S&P 500 reached record closing highs, supported by optimism in AI, semiconductors, cloud infrastructure, and mega-cap technology earnings.
AMD, for example, surged nearly 19% after forecasting higher-than-expected quarterly revenue, lifting broader tech and semiconductor-related indices. While equities performed strongly, leadership narrowed, showing that gains were concentrated in a smaller group of tech-heavy stocks.
Dollar Strength Pressures Currencies
US economic resilience drove the USD higher, as traders reassessed near-term Fed rate cuts. Strong employment, consumer spending, and sticky inflation helped Treasury yields remain supported, boosting the dollar against currencies where central banks appear closer to easing.
The USDCAD chart highlighted a steady uptrend through May, with the price holding above its moving average and building higher highs. The euro remained flat near $1.1642, the pound held near $1.3435, and the Australian dollar advanced slightly to $0.7165, while the New Zealand dollar gained 0.4% to $0.5960 amid hawkish signals from the RBNZ.
Precious Metals See Mixed Momentum
Gold and silver started the month on firmer footing due to softer inflation signals, geopolitical concerns, and expectations of possible Fed easing. However, by mid- to late-May, stronger US data, higher Treasury yields, and renewed USD strength drove gold decisively lower.
XAU/USD moved toward the $4,386 area by month-end, reflecting a clear loss of momentum after earlier gains. Silver remained more volatile due to its industrial exposure but faced similar pressures.
Oil Volatility Remains Central
Oil markets stayed headline-driven throughout May, trading within a broad range. US-Iran negotiations were the key catalyst, with Brent crude falling from a May high near $109.47 to $87.11 following reports of potential ceasefire extensions and eased shipping restrictions through the Strait of Hormuz. Despite the decline, fresh sanctions imposed on Iran on May 28 maintained a risk premium in oil prices, highlighting that geopolitical uncertainty remains central to market sentiment.
Bitcoin Correction
Bitcoin’s early May rally faded as stronger USD and higher yields weighed on risk appetite. The digital asset slipped below its moving average, testing the lower part of its recent recovery structure. While still above February and March lows, momentum weakened, showing a corrective phase. The macroeconomic context, including tighter financial conditions and stronger US data, influenced this decline.
Early Signals for June
June starts with markets split between strong equity momentum and a cautious macro backdrop:
-US Fed Policy: Strong US data and sticky inflation have reduced certainty over near-term rate cuts, supporting the USD.
-Oil: Progress in US-Iran talks could lower oil prices, easing inflation pressures, while setbacks could raise the risk premium.
-Equities: Nasdaq-led tech gains continue, but a sharper reversal in mega-cap technology could affect broader indices.
-US-China Relations: Follow-through on trade, technology, and supply-chain discussions will be closely monitored.
Markets are expected to remain selective, with US equities supported if earnings remain strong, while USD strength, oil volatility, and slower rate-cut expectations may weigh on gold, crypto, and non-US markets.
Read more on May market performance and June signals for Forex, equities, and commodities in this article below.
Publication date:
2026-05-29 07:31:36 (GMT)
