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Friday, May 22, 2026
What’s happening: US stocks closed higher on Thursday as investors monitored the latest developments related to the Middle East conflict.
What happened: The Dow Jones index surged to a record close on Thursday amid hopes of a peace deal between the US and Iran.
Investors also assessed the latest round of earnings and economic reports released during the session.
Why it matters: US equity markets surged on Wednesday, ending the S&P 500 index’s three-day downturn, as oil prices fell on news of Washington being in the final stages of talks with Iran.
Crude oil prices fell for the third straight session on Thursday after Iran said that the latest proposal sent by the US had narrowed the gap between both sides. Although US Secretary of State Marco Rubio signalled some “good signs” of an agreement being reached with Iran, he added that a deal would be unfeasible in case Tehran announced a tolling system in the key Strait of Hormuz route.
The decline in crude oil prices lent support to overall market sentiment as higher energy prices have been stroking fears of inflation.
Utilities were among the top performing sectors on Thursday, followed by materials and consumer discretionary. Energy and consumer staples were among the worst performing sectors during the session.
Although Nvidia released blockbuster earnings and issued a strong outlook, its stock fell around 1.8% on Thursday amid profit taking. Walmart’s stock also lost more than 7% after the retailer issued weak earnings outlook for the second quarter.
Shares of Intuit shed 20% after the company issued a softer forecast and announced plans to reduce 17% of its workforce.
The US released economic data showing a decline in jobless claims by 3,000 to 209,000 last week, signalling continued resilience in the labour market. Meanwhile, manufacturing activity surged to a four-year high in May. The S&P Global composite PMI came in at 51.7, unchanged from the previous month.
The Dow Jones index jumped 276.31 points, or 0.55%, to a record closing of 50,285.66 on Thursday, while the S&P 500 rose 0.17% to settle at 7,445.72 and the Nasdaq 100 climbed 0.20% to 29,357.27.
What to watch: Investors will continue monitoring the progress in negotiations between the US and Iran, with Tehran’s uranium reserves and control over the Strait of Hormuz remaining Washington’s key concerns.
Data on Michigan consumer sentiment (1800 UAE Time) and CB leading index (1800 UAE Time) from the US will be released today. Analysts expect the University of Michigan’s consumer sentiment index to decline to a record low of 48.2 in May from 49.8 in the previous month. The CB leading index is expected to fall 0.2% in April following a 0.6% decline in the previous month.
Context: The euro slipped versus the US dollar this morning as investors digested the latest economic reports.
Details: Data released on Thursday showed that the Eurozone’s current account surplus fell to €24.1 billion in March from €38 billion in the year-ago period.
The S&P Global Eurozone manufacturing PMI declined to 51.4 in May from 52.2 in the previous month, missing market estimates of 51.8. The latest reading signalled the softest growth in region’s private sector activity in three months.
Eurozone’s services PMI declined to 46.4 in May from 47.6 in April, signalling the largest contraction since early 2021. Eurozone’s composite PMI also declined to 47.5 in May from 48.8 in the previous month, indicating the sharpest pace of decline in private-sector activity since October 2023.
Eurozone’s consumer confidence rose to -19 in May from -20.6 in the previous month. However, consumer confidence remained firmly in the negative zone.
The European Central Bank, which had kept interest rates unchanged last month, signalled a rate hike as early as June.
The European Commission lowered its projections for Eurozone’s GDP growth for the coming years, citing inflation concerns stemming from the Middle East conflict. The bloc’s GDP is now expected to grow by 0.9% in 2026, versus prior expectations of 1.2%.
Strength in the US dollar also weighed on the EUR/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose to 99.25 this morning.
The EUR/USD pair edged lower to 1.1617 this morning, while the EUR/GBP forex pair rose slightly to 0.8652.
What to watch: Investors will continue monitoring developments related to the US-Iran conflict.
Data on Germany’s Ifo business climate (1200 UAE Time), Ifo current conditions (1200 UAE Time) and Ifo expectations (1200 UAE Time) will be released today. Germany’s Ifo business climate index, which fell 1.9 points to 84.4 in April, is expected to edge lower to 84.2 in May. Analysts expect Germany’s Ifo current conditions index to decline to 85.1 in May from 85.4 in the previous month, while the Ifo expectations index is projected to rise to 83.5 in May from 83.3 in April.
Other Markets: Asia-Pacific indices traded higher this morning, with the Nikkei 225 and S&P/ASX 200 up by 1.90% and 0.31%, respectively.
The Russian Ministry of Defence said that it has transferred nuclear warheads to Belarusian forces for a strategic nuclear drill. The news sent the USD/RUB pair lower in forex trading this morning.
New Zealand’s retail sales surged 0.9% in the first quarter, at the same pace as in the previous quarter. The latest reading topping market estimates of 0.5% growth lent support to the NZD/USD forex pair.
Argentina’s consumer confidence index rose to 40.14 in May, up 1.26% on a monthly basis, which sent the USD/KRW pair slightly lower in forex trading this morning.
UK’s S&P Global services PMI declined to 47.9 in May from 52.7 in the previous month. The latest reading missed market estimates of 51.7 exerted pressure on the GBP/USD forex pair.
Japan’s annual inflation fell to 1.4% in April from 1.5% in the previous month. However, the USD/JPY pair rose in forex trading this morning.
Turkey’s tourist arrivals (1200 UAE Time) and foreign exchange reserves (1530 UAE Time), Canada’s CFIB business barometer (1500 UAE Time), retail sales (1630 UAE Time), PPI (1630 UAE Time) and raw materials prices (1630 UAE Time), India’s bank loan growth (1530 UAE Time), deposit growth (1530 UAE Time), foreign exchange reserves (1530 UAE Time) and M3 money supply (1530 UAE Time), Mexico’s economic activity (1600 UAE Time), GDP growth rate (1600 UAE Time) and mid-month inflation rate (1600 UAE Time), US Baker Hughes oil rig count (2100 UAE Time) and Baker Hughes total rigs count (2100 UAE Time), as well as Argentina’s retail sales (2300 UAE Time).
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