The Word from Main Street
Market Update for the Week of May 25th, 2026
As Memorial Day weekend arrives and summer gatherings begin, you’ll likely find yourself attending a few backyard BBQs over the next several months. Beyond good food and conversation, these gatherings can sometimes offer an interesting glimpse into overall investor sentiment.
In the past, we’ve talked about the idea of the “Cocktail Party Bullish Percent” indicator — a lighthearted way to gauge how optimistic or pessimistic people are feeling about the markets based on everyday conversations. In the spirit of Memorial Day weekend, consider this the seasonal counterpart: the “Backyard BBQ Bullish Percent” indicator.
As you spend time with family and friends, it may be interesting to listen for where conversations naturally land when the topic of the economy or markets comes up. Our expectation is that you’ll hear a wide range of perspectives, with most opinions landing somewhere in the middle — reflecting the uncertainty and balanced sentiment we continue to see today.
Source: Nasdaq Dorsey Wright
As you connect with friends, family, and others, there’s a good chance the conversation may eventually turn toward the economy and the markets. With that in mind, we wanted to share a few notable recent developments and key themes we are continuing to monitor, so you have a current perspective on what’s happening in today’s market environment.
~ While Domestic Equities (U.S. stocks) have rebounded from their first quarter swoon and notched several record highs over the last month, International Equities still hold the top spot in the DALI (Dynamic Asset Level Investing) sector rankings. The Emerging Markets have outpaced the S&P 500 by more than 10% year-to-date (through 5/20) with gains of 19.65% and 8.7%, respectively.
~ Geopolitical uncertainty has helped to keep Energy at the top of the DALI Domestic Equity sector rankings for the last two months. Technology, which has been perhaps the most consistent area of relative strength in Domestic Equities over the last decade, has rebounded from a Q1 slump and now sits in second place.
~ The futures market is currently pricing in about a 54% chance that the Fed will raise interest rates this year. Earlier this year, the market had been expecting easing from the Fed, but concerns about rising energy prices and inflation have shifted the narrative. Long-term U.S. Treasury yields are sitting near multi-year highs as the 30-year yield index hit 5.15% last week.
~ Commodities have handily outpaced stocks this year as the S&P GSCI Commodity Index is up more than 35% year-to-date (through 5/20). But it has been far from smooth sailing as there has been extreme volatility in precious metals and energy contracts. There has been a lack of sustained leadership in Commodities since precious metals precipitous drop earlier this year.
~ So far, it has been a banner year for momentum as the Relative Strength Spread Index, which measures the performance spread between high momentum stocks and laggards, currently sits at an all-time high.
The current reading for the PR4050 is: U.S. Equity Core = 98.59% & Money Market = 3.52%. For the PR4050 indicator to trigger and alert us when we should consider moving to cash, U.S. Equity Core must be 40% or below and Money Market must be 50% or above.
Source: Nasdaq Dorsey Wright
Below is the most recent D.A.L.I. (Dynamic Asset Level Investing) Indicator showing International Equities and Domestic Equities in the top two spots, while both maintain a commanding lead over Cash and Fixed Income.
Source: Nasdaq Dorsey Wright
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These views are those of the author, not of the broker-dealer or its affiliates. This material contains an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. All investments involve risk, including loss of principal. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. All indices are unmanaged and may not be invested into directly.
Technical analysis is based on the study of historical price movements and past trend patterns. There is no assurance that these movements or trends can or will be duplicated in the future. Nasdaq Dorsey Wright developed the indicators described above. They have been prepared without regard to any particular investor's investment objectives, financial situation, and needs. Accordingly, investors should not act on any recommendation (express or implied) or information in this report without obtaining specific advice from their financial advisors and should not rely on information herein as the primary basis for their investment decisions.
Nasdaq Dorsey Wright’s “DALI" employs relative strength-based analysis to rank macro asset classes based on developing leadership trends within the global capital markets. The objective guidance within DALI provides the tools necessary to properly allocate portfolios across all major asset classes in an effort to emphasize strength wherever it exists. Domestic Equities, International Equities, Commodities, Currencies, Fixed Income and Cash are evaluated daily to identify dynamic developments across investment genres, as well as within them. This tool provides the tactical precision that allows investors to adapt as the market leadership changes.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.
The S&P 500® Index: A free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500® are those of large publicly held companies that trade on either of the two largest American stock market exchanges: the New York Stock Exchange and the NASDAQ.
MSCI World Index: A broad global equity index that represents large and mid-cap equity performance across 23 developed markets countries.
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