S&P 500 Gains 11.25% YTD as AI CapEx Boom Offsets $4.50 Gas Shock
Updated
Updated · Journal Record · Jun 12
S&P 500 Gains 11.25% YTD as AI CapEx Boom Offsets $4.50 Gas Shock
1 articles · Updated · Journal Record · Jun 12
Summary
U.S. stocks extended their 2026 advance in May, with the S&P 500 rising 5.25% for the month and 11.25% year to date despite the Iran conflict and a prolonged Strait of Hormuz closure.
Nearly 28% aggregate S&P 500 earnings growth and an AI-driven capital spending boom helped power the rally, while household consumption stayed resilient, supported in part by elevated housing and equity wealth.
Core PCE climbed to 3.3%, gasoline topped $4.50 a gallon in early May, and the 10-year Treasury yield reached 4.67% mid-month before easing as U.S.-Iran talks improved late in the month.
About 125,000 monthly payroll gains suggest labor conditions are improving, but consumer sentiment remains weak and the U.S. savings rate has fallen to 2.7% as inflation outpaces wage growth.
Markets are effectively betting the Strait will reopen and oil and inflation will ease in the second half of 2026; if that fails, growth and earnings forecasts face downward revisions.