Asset Management
06/01/2026 Market Strategy
June 01, 2026
Key Takeaways
With May in the rearview mirror, two thirds of the second quarter is done. Traders and investors will now navigate the six -week road ahead to S&P 500 Q2 earnings season which won’t really get underway until the big banks report results on July 14.
Our expectations are for the Fed to remain independent on what we expect will be a successful transition of leadership.
And it won’t be until a little over two weeks from now (June 17) when market participants will get to see beyond mere ponder and projection the interest rate decision of the first FOMC meeting under the leadership of Kevin Warsh as Fed Chair. Our expectations are for no major change in policy at that meeting and with no change to Fed’s benchmark interest rate.
The recent inflation data released over the course of the last few weeks should not in our view have been too much of a surprise to market participants as the price of oil and other commodities have surged since the start of the Iran conflict that began in late February.
Current news flow with regard to negotiations taking place between the US and Iran reflect difficulties that are not uncommon in resolving outbreaks of hostilities particularly in the Middle East. History is littered with conflicts in the Middle East followed by hard -won periods of peace that too often have shown to be too fragile to be permanent.
That said, we do expect some kind of resolution to be arrived at because of the economic and geopolitical pressures put on both sides of the negotiation table tied to the collateral damage caused to economies around the world as a result of the current conflict.
Some choppiness in the markets could develop as markets move through the winding down period to the close of the S&P 500’s Q1 earnings season with six weeks to go until the Q2 earnings season begins on July 14.
As we move towards the summer months, politics stateside and elsewhere around the world will likely take up the slack in terms of what traders and investors can worry about with the day-to-day dissemination of the news du jour, particularly regarding inflation and market-related news tied to developments in AI, the conflict with Iran, and other news reflective of economic growth here and abroad.
We recall that over the course of the last few years the period between the end of an S&P 500 earnings season and the start of the next earnings season usually comes with some level of increased volatility as traders parse, ponder, and project on economic data and corporate news tied to things that move the needle on asset class performance and are assessed as to their potential impact on market sentiment.
So far this year, varying degrees of uncertainty generated by a multitude of factors have caused asset classes including stocks and bonds to bounce between gains and losses at times that have not precluded what has been an extraordinary series of rallies that have offset negative interim news that has managed to try the conviction and the patience of market bulls. A series of what we have come to call “detours” in the direction the market has chosen to take intermittently when some catalyst appears allowing bears, skeptics , and nervous investors to take some profits without FOMO midst a bull market that has legs to move higher on fundamentals tied to the economy, corporate earnings, job growth, and the consumer, which have proven resilient so far.
At the core of the success of the equity markets , trajectory stateside has been in our view monetary policy by the Fed that has shown remarkable sensitivity in honoring its dual mandate through challenging times that include the Great Financial Crisis, the COVID pandemic, the global supply chain disruption, stickier inflation from March 2022 and currently inflation tied to a surge in oil prices and economic disruptions.
Our expectations are for the Fed to remain independent on what we expect will be a successful transition of leadership.
As Q1 S&P 500 earnings season draws near a close with 97% of the S&P 500’s companies having reported results, earnings are up 27.7% year over year on back of 11. 4% revenue growth with ten of the benchmark’s eleven sectors reporting positive earnings growth in the period and eight sectors posting double-digit growth in the period.
Markets stateside closed broadly higher last Friday with three major benchmarks closing at new record highs including the Dow Jones Industrials, the S&P 500, and the NASDAQ Composite.
We should note that the day before (Last Thursday), the Russell 2000 and the S&P 600 (both small -cap indices) closed at their latest respective record highs.
The S&P 400 (mid -caps) ended the month just shy of a new record high but closing just 0.13% below its latest record high reached on May 5.
We remain positive on stocks particularly in the US but also from a global perspective on select international markets once the current conflict in the Middle East moves towards resolution in earnest and the economic backdrop can move towards a new normal.
Our favorite sectors of the S&P 500 remain: information technology, communications services, industrials, financials , and consumer discretionary.
We persist in favoring GARP (growth at a reasonable price) stocks, and “growthier” value (avoiding value traps) and weighting cyclicals over defensive stocks.
We suggest intermediate - to longer -term investors consider the importance of diversification stateside across sectors, market caps and style (growth vs. value) and avoid overconcentration in portfolio positioning.
Resilience across the fundamentals that have carried markets this far remains key in our view for the current bull market to continue climbing the proverbial wall of worry in the manner it has shown capable of since 2023.
We maintain our target price which we initiated last December for the S&P 500 in 2026 of 8,100. We have been asked by investors and members of the press if based on the market levels reached thus far by the markets if we have plans on raising our target price. Our reply remains uniform: “It is our discipline to avoid raising our target price until it is reached or exceeded at a market close.”
Chief Investment Strategist, Oppenheimer Asset Management Inc.
John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business, and other notable networks.
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