Earnings Driving Stock Market, Bonds Flat, IPOs strong, and Wine Country

May 24, 2026 HAPPY MEMORIAL DAY AND HAPPY GRADUATION SEASON: All of us will experience Memorial Day this weekend, and many of us will get the opportunity to celebrate a graduation this season. In that spirit, I will share words from a graduation speech last week...good advice for all of us, not just recent grads:

"Friendship now requires much more intentionality than it once did. So my advice, as you think about what does and doesn’t deserve your attention, is reach out to others, even when it feels awkward. Call someone you love just to say 'hi.' Invite someone to dinner and say 'yes' when someone invites you. Be the one who makes things happen in the real world, and others will be grateful to you."

Jonathan Haidt (author of The Anxious Generation), NYU Commencement Address 2026

OIL PRICES RETREAT: The Brent Crude Oil Wholesale Spot price made some welcome progress in a downward direction. After ending last week at $114 per barrel, the price decreased to just under $106. Media reports about a potential deal between the U.S. and Iran caused the movement.

NEW RECORD HIGH: The S&P 500 experienced its eighth straight week of gains (longest such streak in three years) hitting a new record high. Lowered oil prices certainly helped, but optimism about tech in general and AI in particular helped fuel this week's gains. Dell was up 22% and HP was up 21%. It would not be surprising to see a pause or some weeks ahead where the markets go sideways as investors absorb the higher inflation data and the possibility of a Fed rate hike. Earnings growth and projected earnings growth, however, continue to give investors appetite for paying higher and higher prices for stocks.

LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.

THE FED: The Fed released minutes from its prior meeting, and they revealed that the Fed is considering the need for further tightening, including the possibility of a rate hike, if inflation persists above its 2.0% target. This revelation, more than anything, tempered the markets and prevented even further gains. Kevin Warsh was sworn in as the new Fed Chair this week. We will now see what the Fed does under new leadership.

EARNINGS: The ten-year average earnings for S&P 500 companies is 9%. The consensus forecast for the next 12 months is 25%. Of the 471 S&P 500 companies that have reported first quarter earnings, 84% have exceeded consensus expectations.

BOND YIELDS: When investors go out to buy bonds on the open market, and the prices on those bonds decrease, then the yield you get on that bond increases. So, increasing yields mean decreasing values. Bonds, so far, are experiencing another poor year for overall returns and yields are increasing. The yield on the 30-year U.S. Treasury has moved above 5% and government bonds for other major economies have likewise seen rising yields. Yields are increasing due to rising inflation and growing government debt. The overall demand for more capital to build out infrastructure for AI and related industries is also pushing higher yields. So while stocks are increasing, bond values have decreased.

IPOS: There have already been 16 IPOs in May of this year, and there were 22 in the first quarter. With all eyes on artificial intelligence, investors are looking at companies that will supply the energy to run those companies in the years to come. In May, Fervo Energy had its initial public offering. This is a geothermal startup company. It applies hydraulic fracturing to tap underground heat. Its shares are up 42% from its IPO. Fervo does not yet generate any meaningful revenue. In addition to Fervo, there are two new nuclear players in Oklo, which is backed by OpenAI, and X-Energy which is backed by Amazon. Of course, the most anticipated IPO at this time is Space X which is expected to launch in mid-June.

WHERE'S DOUG?: I have heard some of you say that they think about "Where's Waldo" when you hear of my latest trip. I do get around. There is a current saying that as people age, they go through the "go go" years, the "slow go" years, and the "no go" years. Deb and I are in the "go go" years, and we are trying to take advantage. We are spending a few days with another couple (with whom we have been friends since my law school days) during this long weekend at a place I had never been: northern California. In particular, we stayed in Sebastopol, a beautiful little town in the middle of wine country. There are vineyards as far as the eye can see, along with some Redwoods.

Have a great week!

Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.

Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545

dmacgray@stonecropadvisors.com

"Because you never know when the last one is." Kyle Busch

"The extravagant expenditure of public money is an evil not to be measured by the value of that money to the people who are taxed for it.." Chester A. Arthur*

"Wisdom, like an inheritance, is a good thing and benefits those who see the sun." Ecclesiastes 7:11 (NIV)

*In commemoration of the 250th anniversary of the United States, I am finding a quote from a president each week, in order. This is the 21th week, and Chester A. Arthur was our 21st president.

SOURCES:

NEW RECORD HIGH: https://www.wsj.com/finance/oil-climbs-on-u-s-iran-uncertainty-stock-market-rally-holds-da96d8f3?mod=stocks_news_article_pos4

THE FED: https://myweeklystock.substack.com/p/weekly-market-recap-may-18-22-s-and?publication_id=697043&post_id=198609880&isFreemail=true&r=s86er&triedRedirect=true

EARNINGS:https://myweeklystock.substack.com/p/weekly-market-recap-may-18-22-s-and?publication_id=697043&post_id=198609880&isFreemail=true&r=s86er&triedRedirect=true

BOND YIELDS: https://www.goldmansachs.com/insights/articles/stock-markets-are-increasingly-vulnerable-to-rising-bond-yields

IPOS: https://www.wsj.com/finance/stocks/a-hot-ipo-lifts-geothermal-power-companies-325a2ac0?mod=stocks_news_article_pos1 AND https://www.pwc.com/us/en/services/consulting/deals/us-capital-markets-watch.html

HAPPY MEMORIAL DAY AND HAPPY GRADUATION SEASON: https://singjupost.com/nyu-commencement-2026-jonathan-haidt-address-transcript/

(c) 2026 Anno Domini, Stonecrop Wealth Advisors, LLC, All Rights Reserved

Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.

SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.