Good morning and welcome to today's market chronicle. It's Friday, May 29, 2026. The S&P 500 just printed a record close, the PCE just printed a three-year high, and the Wall Street consensus is somehow that both belong in the same victory lap.
Thursday brought the April PCE: 3.8% annualized, the highest inflation reading since May 2023, lifted largely by the oil shock from the Iran war that began in late February and has since driven a gallon of gas to $4.42. Core PCE settled at 3.3% annually, which is also not 2%, in case anyone needed the reminder. And yet the Nasdaq and the S&P 500 hit all-time highs. The market's logic, if you are generous enough to call it that: the monthly prints came in a shade softer than expected, therefore inflation is improving, therefore the Fed will cut, therefore buy. That celebrating 3.8% as a win would have made Paul Volcker choke on his coffee is something everyone is pretending not to notice. Kevin Warsh, inheriting his first PCE report as the new Fed Chair, apparently leaves the market cold for now, so it did the only thing it knows: buy.
And then there was the Iran story. Iranian state television circulated what appeared to be a draft peace memorandum, detailing lifted naval blockades, troop withdrawals, Hormuz back open for business. Oil briefly dropped below $89. For twenty minutes, everyone in the wonderful world of finance became a geopolitical analyst. Then the White House called it a complete fabrication, JD Vance said Washington was "not there yet," and oil reversed. The canary here is not that the report was false. It is that the market moved on it at all, which tells you exactly how desperately traders want this war to end and how thin the geopolitical consensus actually is.
Friday is the last trading day of May, which means window dressing is either over or just getting started, depending on which fund manager you believe. The calendar is quiet, no major releases expected after yesterday's fireworks. Nineteen earnings reports are on the docket, none likely to move the tape. The real question is whether the record-chasing carries into the close, or whether someone finally looks up and notices that oil is back near $94 and inflation has been at a three-year high since yesterday morning.
S&P futures trade near 7,585 this morning, implying the open extends Thursday's record. Gold sits around $4,460, either a safe-haven bid or a simultaneous protest vote against every central bank on earth. Brent crude has recovered to roughly $94 after the brief peace-deal dip. Bitcoin trades near $73,200, down modestly, perhaps sulking that gold keeps getting all the inflation-hedge coverage. The 10-year yield holds near 4.50%, which is, one notes quietly, not the yield of a country with a 2% inflation target.
It is the last Friday of May. The records are real, the inflation is real, the peace deal was not. Have a good one.