Stocks keep climbing while Main Street confidence hits new lows

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Market Report

As of May 22, 2026, 4:00 PM ET

For informational purposes only.

Summary

It probably feels strange right now: headlines scream “stagflation” and record‑low consumer confidence, gas is expensive heading into the holiday, and yet your portfolio might be quietly hitting new highs.

What defined today

U.S. stocks drifted higher again, capping a week where the Dow and other major indexes notched fresh records. The S&P 500 gained about 0.4%, the Nasdaq was up a bit less, while small caps and the Dow outperformed. Under the surface, riskier, more economically sensitive names led the way.

That’s the key story: Wall Street is still in “risk‑on” mode even as Main Street feels lousy.

How the money moved

Buying was broad rather than just a handful of mega‑caps. About half of all stocks rose, and the equal‑weight market was up more than the regular S&P, which means the average stock did a bit better than the giants.

High‑beta stocks beat the “safe and boring” low‑volatility names again.
Value stocks outpaced growth for the day, even though growth has still won over the past month.
Sector winners were healthcare, technology, utilities and industrials; the only real weak spot was communication services.

Tech is still the main character, but it’s getting noisy. Some chip and AI names ripped higher (Qualcomm jumped more than 10%, AMD surged), while Nvidia finally took a breather after a monster run. That fits with the data showing high dispersion: lots of big individual winners and losers inside a calm index.

Volatility stayed low – the VIX is under 17 – but ticked up slightly even as stocks rose, a “spot up, VIX up” pattern that says people are quietly paying for some protection at record levels.

Macro backdrop: upbeat markets, downbeat people

Today’s data and recent reports paint a very mixed picture:

The University of Michigan survey shows consumer sentiment at a record low, with people worried about inflation and the Middle East conflict.

Stocks inched higher into the holiday weekend, capping a week of fresh record highs for major U.S. indexes, with small caps, value, and high‑beta names quietly taking the lead from the mega‑cap techs. Under the hood, volatility stayed low at the index level but stock‑by‑stock moves were big, with chip and AI plays swinging sharply in both directions.

At the same time, the economic mood music is souring: consumer sentiment just hit a record low, gasoline prices are near four‑year highs, and Fed officials are openly keeping the door open to more rate hikes if inflation doesn’t cool. That leaves investors in a strange spot where portfolios look good on paper, but the backdrop feels fragile, making upcoming inflation data and bond yields the key things to watch next.

Gasoline prices are near four‑year highs into Memorial Day, and there’s talk they could climb further if Middle East shipping snarls persist.

Business surveys point to slower growth and sticky inflation, and Fed officials like Governor Waller are openly saying rate hikes are still on the table if inflation doesn’t cool.

Yet long‑term Treasury yields barely budged and even eased a touch today, which helped stocks. The yield curve looks relatively “normal,” and the overall volatility regime is still calm.

What this changes for you

For now, the near‑term risk picture is this: indexes remain in strong uptrends with low headline volatility, but the gains are increasingly being driven by riskier, more jumpy parts of the market. If you own broad funds, you’re benefiting from the grind higher. If you’re concentrated in hot AI and chip names, your daily swings are likely getting louder.