Markets Rally for a Seventh Straight Week as New Fed Chair Kevin Warsh Signals a Hawkish Shift

May 20, 2026 · 54 sources

Markets Overview

The S&P 500 (^GSPC) marked its seventh consecutive weekly gain, recording a roughly 16% return since the March low. Despite a wild 2026 marked by geopolitical tensions, 100 years of historical data suggests the current upward momentum may still favor buyers.
Application-software stocks saw renewed vigor as ServiceNow (NOW) flashed a green light for the sector, heading for its best day in a year.
Oil futures climbed following President Donald Trump's warning that the "clock is ticking" on Iran, exacerbating concerns over shrinking supply buffers. Meanwhile, a JPMorgan Chase note indicates investors are increasingly choosing Bitcoin (BTC) over gold as an inflation hedge, a strategy some analysts warn could backfire.

Target (TGT) topped earnings expectations and boosted its outlook. The retailer's turnaround plan—featuring upscale baby gear and revamped shopping carts—is reportedly starting to resonate with consumers.
Home Depot (HD) posted an earnings beat and maintained its full-year outlook, providing relief to worried investors. However, the stock briefly slipped below $290 to hit a two-year low, raising questions about whether its over 3% dividend yield makes it a value buy.
Hospitality software provider Agilysys (AGYS) rallied after reporting strong quarterly growth metrics that calmed investor concerns regarding AI-driven disruption.
KE Holdings (BEKE) trounced the market following the release of robust first-quarter earnings, while Alibaba (BABA) showed signs of slowly accelerating revenue growth.
TAT Technologies beat estimates with GAAP EPS of $0.26 and revenue of $41.1M. Conversely, Immunovant missed estimates with a GAAP EPS of -$0.73, and ZIM slipped to a Q1 loss due to lower carried volumes and rate pressures.

The Federal Reserve has officially entered a new era. Following Jerome Powell's final day as Chair on May 15, new Fed Chair Kevin Warsh delivered remarks that portend a significant ideological shift at the central bank.
Inflation has surged to a three-year high, hitting consumers hard across food, apparel, and gas. Retirees are feeling the pinch as an analysis of the last decade shows annual Social Security cost-of-living adjustments (COLAs) are failing to keep pace with real-world inflation.
Wall Street legend Roger Altman of Evercore warned that the oil market is reaching a "tipping point" that could destabilize equities. Altman cautioned that spiking crude prices could trigger the "second big inflation shock of this decade after COVID."
Chart analysts warn that Treasury yields could be headed much higher. A new "pennant" chart pattern suggests the next generation of investors may face a prolonged era of elevated interest rates.

Veteran wealth manager Ted Oakley of Oxbow Advisors warns that a massive scramble into the energy sector is imminent. With the Iran war spilling over into the energy markets, Oakley believes energy investments are currently positioned to be "even better than tech."
Semiconductor demand continues to soar, benefiting industry leaders and sparking debates over whether Intel (INTC) presents a better value play compared to Taiwan Semiconductor (TSM). Broadcom (AVGO) has surged 23% year-to-date after a strong rally since April.
The healthcare sector is drawing income investors' attention. Often overlooked for dividends, select healthcare names are offering high yields and preparing to raise their payouts.

NextEra Energy (NEE) is making a massive $67 billion all-stock bet on AI power demand by acquiring Dominion Energy (D). Dominion shareholders will receive 0.8138 shares of NextEra for every share they own.
Berkshire Hathaway (BRK.A, BRK.B) successor Greg Abel is shaking up the portfolio. In his first major moves since Warren Buffett stepped down, Abel dumped 16 stocks in Q1, including the complete exit of Visa (V) and Mastercard (MA).
Billionaire Stanley Druckenmiller dumped Alphabet (GOOGL) in the first quarter. Instead, the hedge fund legend piled into a trio of skyrocketing memory and storage stocks.
Aluminum could hit $4,000 a ton amid the most bullish supply setup in over 50 years. Analysts project the metal's price will soar as the market digests the largest supply shock since the 1950s.
Realty Income (O) declared its 671st consecutive monthly dividend, reinforcing its status as a core holding for passive income seekers with a yield north of 5%. Analog Devices (ADI) also declared a $1.10 dividend, alongside Golar LNG (GLNG) at $0.25.
Eli Lilly (LLY) is attempting to mount a recovery after trending below $900 earlier in the year, with analysts now eyeing a potential path to $2,000 per share.

Macro Headwinds vs. Market Momentum: The market is exhibiting strange behavior—rallying sharply for seven weeks straight while inflation runs at a three-year high and geopolitical tensions push oil prices higher. The assumption of impending rate cuts has evaporated, replaced by the reality of a more hawkish Kevin Warsh-led Fed.
The AI Energy Trade: NextEra’s $67 billion acquisition of Dominion signals that utilities and energy infrastructure are becoming the new backbone of the AI trade. As data centers demand exponential power growth, institutional capital is rapidly pivoting from pure-play tech to energy suppliers.
What to Watch Tomorrow: Look for continued sector rotation into energy and defense stocks as oil prices react to the latest Trump administration statements on Iran. Additionally, monitor Treasury yields for a breakout from the noted "pennant" pattern, which could pressure high-valuation software names that rallied today.