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Markets rally as IPO momentum builds

2026-05-27

Paul Eitelman, CFA

Paul Eitelman, CFA

Global Chief Investment Strategist




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Hi, welcome to market weekend review for the week ending May 22nd, 2026. Uh this week in markets, I think three themes stood out. Uh first, uh we're towards the tail end of the first quarter reporting season for corporates and we're seeing strong global earnings growth here that is helping sustain equity markets. Uh second uh this week more data around the resilience or not of the global business cycle to the conflict in the Middle East and the protracted disruption to commodity supply. Uh and then third and finally, it seems like 2026 is really shaping up here to be a year of blockbuster IPO activity uh with SpaceX announcing its intention to go public uh in as soon as the next couple of weeks. Starting with earnings, uh, with Nvidia reporting its results on Wednesday, we're now towards the tail end of first quarter results. Uh, in the United States, the numbers were really terrific here in Q1. We're tracking earnings growth on a year-over-year basis of north of 20% for the S&P 500 index, which is really quite strong. and pretty encouraging management guidance looking out into the second quarter uh particularly for the IT sector and also some of the commodity link sectors helping to support uh ongoing upgrades to analyst earnings estimates. So I think that healthy earnings picture is keeping equity markets on track this week through Thursday's close. Uh we're seeing gains across most major regional equity markets. The S&P 500 index is tracking a gain of about a half a percent on the week. The MSEI country world index about 1% the MSI emerging markets index a gain of about one and a half percent. So pretty solid and broad global results through Thursday's close. Uh second is uh economic data and the resilience or not of the global business cycle. I would say at a high level what we're seeing is a pretty resilient picture in the United States but some fraying and risk and slowing in economies that are more exposed to the energy shock. So starting with the United States uh this week a couple of things stood out to me. We got the May purchasing manager indices and on the manufacturing side in particular we saw a lot of strength uh with uh that segment moving up to a 46-month high in the survey where it seems like some of the fiscal stimulus from last year and the AI buildout are helping to support industrial activity in the United States. The consumer also looks like it's continued to be engaged here through miday. And when we look at um the labor market, both in terms of job growth through some of the weekly ADP figures, but also really low initial jobless claims, it seems like the labor market's pretty stable. So all in all, a US picture that looks resilient. However, when we move uh across some of the global economies, particularly in Europe, this week, the purchase demand indices pointed to a slowing in activity for the month of May where both in the Euro zone and the UK, those PMIs drop below the 50 line uh and suggest that growth in the region could be stalling. And I think that bears some watching here in the weeks and months ahead, particularly if the conflict and commodity supply disruption persists into the second half of 2026. Uh and then third and finally is uh the IPO calendar. It seems like 2026 is shaping up to be a blockbuster year of record IPO activity in dollar terms. Uh this week some big news with SpaceX announcing its intention to go public uh listing on the NASDAQ exchange with a share sale. uh scheduled for potentially as early as mid June. Uh this is a a big deal in size with some of the valuation numbers that are being talked about potentially placing SpaceX as being one of the 10 biggest public companies in the world after the transaction. So it's been an area of conversation uh with our clients uh engaging around what kind of solutions they might be able to think about from a a tax perspective, a concentration perspective and a hedging perspective as a private market winner transitions into a large concentrated public market exposure in portfolios. So a lot of uh engagement around how to think about those issues. That's what stood out to me uh in markets this week, but ultimately a positive one in terms of near-term performance for equities and some stabilization in interest rates and energy markets. Thanks for tuning in and we hope to see you again soon. Hi, I'm Sophie Antelbe, head of portfolio and business consulting at Russell Investments. If you liked what you just saw and heard, consider subscribing to our YouTube channel or check us out on LinkedIn. Thanks for tuning in.

Key takeaways

  • Global earnings growth continues to support equities
  • U.S. economic data remains resilient despite energy shocks
  • IPO activity accelerates as SpaceX prepares to go public

Bond volatility remains

Global equity markets moved modestly higher this week as first-quarter earnings season continued to deliver strong results.

With Nvidia reporting this week, the U.S. earnings season is now nearing completion. Overall, earnings growth for the S&P 500 is tracking above 20% year-over-year, reflecting a particularly strong reporting period.

Management guidance has also remained constructive, especially across technology and commodity-linked sectors. This has helped support further upgrades to analyst earnings expectations.

Through Thursday’s close:

·        The S&P 500 Index gained roughly 0.5% on the week

·        The MSCI All Country World Index rose around 1%

·        The MSCI Emerging Markets Index advanced approximately 1.5%

The broad-based nature of these gains suggests that healthy earnings growth continues to provide an important foundation for equity markets.

U.S. economy shows resilience as Europe slows

This week’s economic data painted a mixed global picture.

In the United States, recent data continued to point toward resilience despite ongoing geopolitical uncertainty and elevated energy prices.

May purchasing managers’ indices showed notable strength in manufacturing activity, which reached its highest level in nearly four years. Fiscal stimulus measures introduced last year, along with continued AI-related investment, appear to be supporting industrial activity.

The U.S. consumer also remains engaged. Labor market data, including weekly ADP employment figures and initial jobless claims, continues to point to stable hiring conditions and a relatively healthy labor market.

Outside the U.S., however, growth signals were softer.

In both the eurozone and the UK, purchasing managers’ indices fell below the 50 threshold in May, suggesting that growth may be stalling. Economies more exposed to higher energy prices and commodity supply disruptions appear increasingly vulnerable as the Middle East conflict continues.

This divergence between U.S. resilience and softer international growth will remain an important theme to monitor in the second half of 2026.

IPO activity accelerates

Another notable development this week was continued momentum in the IPO market.

SpaceX announced plans to go public on the Nasdaq, with a share sale potentially taking place as early as mid-June. Based on current valuation discussions, the company could become one of the ten largest publicly traded companies globally following the offering.

The broader IPO environment is shaping up to be one of the strongest years on record in dollar terms.

For investors, these developments raise important portfolio questions around concentration risk, taxation and hedging strategies as private market winners transition into large public market exposures.

Articles of the week:

Gilt market nerves return to the UK

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