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26.05.202609:30 Forex Analysis & Reviews: Stock market on May 26: S&P 500, NASDAQ edge lower

Rilevanza fino a 03:00 2026-05-27 UTC--4

Markets were closed yesterday. Last Friday, equity indices finished higher: the S&P 500 rose by 0.37%, the Nasdaq 100 strengthened by 0.19%, and the Dow Jones Industrial Average jumped by 0.58%.

Exchange Rates 26.05.2026 analysis

Today, markets started the day with a sharp sell-off, most visible in futures on US indices. It appears markets are still balancing between cautious optimism over the Iran talks and a fresh flare-up of tensions — US forces struck missile launchers in Iran and boats reportedly attempting to lay mines in the Strait of Hormuz. Oil bounced after yesterday's collapse, but overall risk sentiment in equities and bonds remained relatively constructive.

The 10-year US Treasury yield fell four basis points. Europe's Stoxx 600 was essentially flat following yesterday's 1% gain. The dollar stabilized after weakening against major currencies in the prior session.

The key question now is how durable this optimism is. US officials characterised the strikes as defensive, and President Donald Trump did not abandon the diplomatic track, saying talks are going well. Yet the initial momentum from Sunday's headlines is clearly fading: the timetable for a possible agreement has slipped from "hours" to "days."

Meanwhile, the bond market is sending its own signal. The gap between 5-year and 30-year Treasury yields narrowed to 81 basis points — the tightest since May last year — and recovered only slightly to 83bp after trading resumed. That suggests investors are increasingly pricing in a scenario, in which the Fed under incoming Chair Kevin Warsh will have to hold interest rates higher for longer rather than cut them.

Notably, Trump publicly said on Friday that he wants Warsh to be an independent Fed chair — an apparent attempt to soothe investor concerns about political pressure on the central bank. The market, however, remains cautious: Trump has previously called for rate cuts, and the divergence between his statements and actual market expectations persists.

Exchange Rates 26.05.2026 analysis

Technically, the S&P 500 analysis shows that the immediate task for buyers is to overcome the resistance level of $7,547. Doing so would confirm renewed upside and open the path to $7,574. Maintaining control above $7,607 would further strengthen buyers' positions. On the downside, buyers need to defend the $7,518 area. A break below that level would likely push the index back to $7,494 and open the way to $7,474.

*La presente analisi del mercato ha un carattere esclusivamente informativo e non rappresenta una guida per l`effettuazione di una transazione.

Jakub Novak,
Analytical expert of InstaSpot
© 2007-2026
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