Last Week on Wall Street - Week of May 26th

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Last Week

on Wall Street

WEEK OF MAY 26TH, 2026

S&P 500

7,585

▲ +2.57% WK

DOW JONES

51,054

▲ +1.35% WK

NASDAQ

26,972

▲ +3.09% WK

10-YR YIELD

4.44%

▲ +14 BPS WK

LEAD MARKETS & MACRO · BY THE WATERLOO RESEARCH DESK

Nine in a Row, and the Bill for It Is Starting to Arrive

The Dow crossed 51,000 for the first time ever, the S&P notched its longest winning streak since 2023, and the AI trade rewrote the earnings script two nights running. The bond market had a different read on all of it.

Nine straight winning weeks for the S&P. The Dow crossed 51,000 for the first time in its history on Friday, the Nasdaq capped off an 8% month of May, and the Russell 2000 spent most of the short holiday week within reach of 3,000. It was a four-day week by the calendar, but the market made it feel longer: Dell delivered a quarterly result so far past consensus it sent Morgan Stanley's hardware analyst into print to say his team had gotten it wrong; Snowflake posted the strongest sequential dollar growth in its history alongside a $6 billion AWS commitment; and a tentative U.S.-Iran memorandum of understanding, still awaiting President Trump's signature, gave energy traders another reason to keep selling crude.

The one instrument that did not join the celebration was the 10-year Treasury. Yields rose roughly 14 basis points on the week, finishing near 4.44%, as Thursday's PCE report confirmed that the Fed's preferred inflation gauge hit 3.8% in April, its worst reading since May 2023. Americans' personal saving rate dropped to 2.6%, the lowest since June 2022. The inflation story and the AI-driven equity rally have been running in parallel for two months now, with equities focused on the former and bond traders focused on the latter. This week, both sides printed new data to work with: the equity bulls got Dell and Snowflake; the bond bears got PCE.

For diversified portfolios, the tension between these two running narratives matters more now than it did three months ago. Nine weeks ago, the dominant question was whether the market would recover from the Iran war shock. That question has been answered. The new question is whether the recovery has gone far enough, fast enough, that the inflation it is generating starts to do real work against the portfolio. A VIX at 15.74 and a 10-year above 4.40% are not obviously compatible unless the ceasefire holds and energy prices keep sliding, which is still, as of Friday, a question rather than a fact.

BOTTOM LINE

Nine straight winning weeks, a Dow above 51,000, and an AI earnings slate that rewrote expectations twice in four days. The bond market noticed the inflation bill attached to all of it. For balanced portfolios, the question is no longer whether the recovery happened; it is whether the thing the recovery is generating, higher yields and stickier inflation, changes the math on what comes next.

BY THE NUMBERS

▸	S&P 500's ninth consecutive winning week, the longest streak since 2023; Dow crossed 51,000 for the first time ever
▸	PCE inflation at 3.8% YoY in April, the worst reading since May 2023; personal saving rate fell to 2.6%, lowest since June 2022
▸	10-year yield rose 14 bps on the week to 4.44%, as bond markets priced the inflation report rather than the ceasefire headlines
▸	U.S.-Iran 60-day ceasefire MOU reported Thursday by multiple outlets; deal would reopen the Strait of Hormuz and lift U.S. naval blockade, pending Trump's approval
▸	Nasdaq up 8% in May, its strongest calendar month since early 2024; VIX closed the week at 15.74
▸	WTI crude settled near $88 Friday as ceasefire optimism offset a fresh round of Hormuz attacks earlier in the week

· TWO STORIES THAT MOVED THE TAPE ·

The Week's Defining Headlines

STORY 01 EARNINGS · AI INFRASTRUCTURE

Dell Reported $44 Billion in a Quarter and the Street Said It Got the Story Wrong

The key takeaway, Dell's AI server business came in so far past what Wall Street had modeled that Morgan Stanley's hardware analyst published a note saying his team got it wrong. The guidance raise was larger than most firms' entire revenue forecasts for the quarter. It was that kind of beat.

Dell's Infrastructure Solutions Group, the division that builds and sells AI servers, grew roughly 180% year over year. The consensus model had nothing like that number in it. Revenue came in nearly $8 billion above what analysts expected; guidance for the full year was raised by more than analysts had projected for the entire quarter. COO Jeff Clarke said on the call that demand exceeded the company's expectations across every geography and every line of business, which is the kind of statement that tends to end the meeting early.

Snowflake reported the same night and also ran past estimates, and the two prints together lifted the infrastructure complex through the long weekend. The pattern is consistent enough now that it is worth naming: the companies actually moving AI hardware and data are not operating on the adoption curve that the models assumed. Dell booked more AI orders in one quarter than most analysts thought the company would book in a year. Whether that pace holds is a different question; that it happened is not in dispute.

DATA THAT DROVE THE STORY

■	Q1 revenue: $43.84B vs. consensus of $35.38B; top-line grew nearly 88% year over year, the largest quarterly gain since Dell returned to public markets in 2018
■	Adjusted EPS: $4.86 vs. consensus of $2.96
■	AI orders: $24.4B booked in Q1 alone; AI server backlog at $51.3B
■	FY27 guidance raise: revenue now $165B to $169B (midpoint +$27B vs. prior guidance); AI server revenue forecast raised to $60B from $50B
■	ISG growth: Infrastructure Solutions Group revenue up 181% year over year, driven by broad demand across geographies and business lines
■	Analyst reaction: Morgan Stanley's hardware team said publicly they got the quarter wrong, describing it as one of the most impressive hardware prints they had covered

Source: CNBC: Dell shocked Wall Street on booming AI server sales →

STORY 02 GEOPOLITICS · ENERGY MARKETS

A 60-Day Memorandum Is on the Table. The Strait Is Not Open Yet.

The key takeaway, U.S. and Iranian negotiators reached a tentative memorandum of understanding Thursday to extend the ceasefire for 60 days and begin formal nuclear talks, according to U.S. officials. The deal would reopen the Strait of Hormuz to unrestricted vessel traffic and lift the U.S. naval blockade. It still required President Trump's signature as of Friday's close, and Iran's foreign ministry called reports of a finalized agreement premature.

Multiple outlets reported the framework Thursday, with U.S. officials confirming its broad outline to Al Jazeera, CNN, and PBS. Pakistan has been the primary mediator since the ceasefire began in April. Treasury Secretary Bessent said Thursday that oil prices could come down quickly once the deal is signed. Crude had been drifting lower most of the week in anticipation; WTI settled near $88 on Friday, about $6 below the prior week's close.

The distance between "largely negotiated" and "signed" turned out to be significant. VP Vance told reporters Friday the two sides were very close but not there yet. Iranian state media called reports of a finalized deal incorrect. Fresh Hormuz attacks earlier in the week had not fully faded from memory. Energy traders, having already given back much of the war premium over the past three weeks on earlier ceasefire optimism, were not inclined to price the finish line before someone actually crossed it.

DATA THAT DROVE THE STORY

■	The MOU: 60-day ceasefire extension, unrestricted Hormuz vessel traffic, U.S. naval blockade lifted, and the start of nuclear talks in 30 to 60 days
■	Status as of Friday close: no Trump signature; Iran's foreign ministry said reports of a finalized deal were "incorrect"; VP Vance said "very close, not there yet"
■	Crude reaction: WTI settled near $88 Friday, down roughly $6 on the week; Brent crude also retreated on ceasefire optimism
■	Mediation: Pakistan has led the ceasefire talks since April 8; Secretary of State Rubio met Pakistan's Foreign Minister on Friday to advance discussions
■	Context: the Strait carries roughly one-fifth of the world's traded oil and gas; its closure has driven PCE inflation to 3.8% and retail gas prices above $4.50 nationally
■	Treasury Sec. Bessent: said oil could "come down very quickly" once a deal is finalized; BofA noted the 10-year yield is unlikely to return to pre-war levels even if the Strait reopens

Source: PBS NewsHour: U.S. and Iran reach tentative deal to extend ceasefire →

· OTHER THINGS WORTH KNOWING ·

Around the Water Cooler

Six stories from this week worth your morning coffee.

EARNINGS · AI SOFTWARE

Snowflake posts its best day ever after a 34% revenue beat and a $6B AWS deal

Product revenue of $1.33B, up 34% YoY, was the company's strongest sequential dollar growth on record. The AWS partnership and deepened OpenAI tie-up gave the print a structural read beyond the quarter.

FEDERAL RESERVE · MACRO

Kevin Warsh is sworn in as Fed chair at the White House, the first since Greenspan in 1987

Trump said he wanted Warsh to "be totally independent" at a ceremony that was itself a study in how much has changed. Warsh inherits a 3.8% PCE reading and a 10-year above 4.40%.

IPO · SPACE TECH

SpaceX files for a June 12 Nasdaq IPO targeting a $1.75 trillion valuation

OpenAI and Anthropic also announced public-market intentions this year, though none of the three have yet posted an annual profit. Analysts flagging late-1990s parallels; the window is open either way.

SEMIS · MEMORY

Micron crosses $1 trillion in market cap on a 19% jump Tuesday

UBS called more than 100% upside from current levels, citing long-term AI memory agreements. Micron joins a short list of Texas-connected semiconductor names that have crossed the trillion-dollar threshold this cycle.

INFLATION · CONSUMER

April PCE hits 3.8%, a three-year high, as savings rate drops to 2.6%

Americans are drawing down savings at the fastest pace since the 2022 inflation peak. Disposable income fell 0.5% in real terms. The Fed's new chair inherits a target that is nearly double the current reading.

MARKETS · MONTH-END

Nasdaq finishes May up 8%, its strongest month since early 2024

The S&P 500 closed May with its ninth consecutive weekly gain. Equity inflows this month have been among the heaviest on record for a four-week stretch, per EPFR Global data.