Nine Straight Weeks. AI Earnings Fuel the Rally. But the Macro Picture Is Gloomy.

Week:

S&P500: +1.43% FTSE100: -0.16% Gold: +1.34% Bitcoin: -0.35%

YTD:

S&P500: +10.96% FTSE100: +6.19% Gold: +6.01% Bitcoin: -12.56%

Source: MarketPulse (OANDA) | Week ending 29 May / Asia Open 1 June 2026

Markets delivered a ninth consecutive week of gains, with the Dow crossing 51,000 for the first time ever. Extraordinary AI earnings and peace process optimism on Iran drove the move. Underneath, the macro data tells a more uncomfortable story.

What drove markets last week

The week opened on the back of President Trump's Memorial Day Memorandum of Understanding with Iran, a non-binding framework giving both sides 30 days to fully reopen the Strait of Hormuz in exchange for economic concessions. Wall Street chose to believe it. WTI crude fell into the low $90s and equities opened the short post-holiday week higher.

The real fuel came from earnings. Dell surged roughly 33% on its best day on record after reporting Q1 FY2027 revenue of $43.8 billion, up 88% year-on-year, $24.4 billion in AI orders booked, and non-GAAP EPS of $4.86, up 214%. Snowflake closed up 36% on the back of a strong quarter and a $6 billion five-year Amazon Web Services partnership. Micron crossed the $1 trillion market cap for the first time on Tuesday, up 19% on the session after UBS nearly tripled its price target to $1,625. Tech as a sector gained 5.2% for the week.

The Dow closed at a record 51,032. The S&P 500 finished May up 5% and the Nasdaq up 8%, its best monthly performance of 2026.

The macro backdrop was far less clean. April PCE came in at 3.77% year-on-year, rounding to 3.8% and the highest reading since May 2023, while core PCE held at 3.3%. Q1 GDP was revised to +1.6% annualised in its second estimate, still well below the +2.0% advance print and a notable step down from the prior trend. Markets largely looked past the data, helped by monthly PCE readings coming in slightly below consensus, but the annual inflation trend is clearly re-accelerating.

The setup entering this week

Markets are priced for a peace deal and an AI earnings supercycle to run simultaneously, while the Fed is being handed data that makes rate hikes increasingly credible. Kevin Warsh chairs his first FOMC on June 16-17. With headline PCE at 3.8%, core at 3.3%, and growth at +1.6%, rate hike odds are approaching 50%.

The Hormuz reopening remains a 30-day process at best, and any breakdown reactivates the full energy inflation channel. The SpaceX IPO is also live: roadshow around June 4, pricing around June 11, Nasdaq debut under SPCX around June 12, with a potential $75 billion raise at a valuation near $1.75 trillion. That is a serious test of public market liquidity.

Looking ahead

The May Non-Farm Payrolls report lands on Friday 5 June. A strong print hardens the case for a hike at the June FOMC. A miss gives the rally room to extend into a tenth week.

FTSE finished the week barely changed, held back by energy sector weakness as oil fell. Gold closed up 1.34%, a quiet signal that not everyone believes the peace trade is settled. Bitcoin remains the outlier, down 0.35% on the week and still 12.56% lower year to date, failing consistently to join the equity rally.

The question entering June is whether markets can hold record highs as the Fed moves toward tightening, the Hormuz deal is unconfirmed, and the SpaceX IPO absorbs significant capital. The AI earnings season has bought the bulls considerable time. NFP on Friday and peace process headlines will show how much runway is left.

WTI is currently near $91-93. Watch the peace process and the NFP print closely.

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