No-Advice Disclaimer: This analysis is for informational purposes only and not a recommendation to buy or sell any security.

Stock Market Outlook: May 17th =
Uptrend

Author: J.Wenger ---- Published: May 17, 2026 ---- Last Updated: 2026-05-17
Disclosure: The author holds no material positions in the securities mentioned. See Editorial Policy & Disclosures for details.

The stock market outlook shows an uptrend in place after the index reached another all time high.

Oil, Energy, and Large Cap Growth outperformed; Emerging Markets, Consumer Discretionary, and Small/MidCap value underperformed.  Inflation data was much higher than expected, pushing interest rates above long-term levels and pressuring other assets.

TREND ANALYSIS

The S&P500 ( $SPX ) rose 0.1% last week.  The index is:
  • ~8% above the 50-day moving average
  • ~10% above the 200-day moving average
The three technical indicators used to identify trends remain bullish.

Technical analysis chart of $SPX showing 6 months of candlesticks with 21-day, 50-day, and 200-day moving averages, volume with EMA(50), ADX(14) with +DI and -DI, and OBV with MA(62) through 2026-03-22.

Technical Analysis – $SPX – 2026-05-17

PERFORMANCE HIGHLIGHTS & COMPARISONS

Asset Classes

Oil ( $USO ) led to the upside last week.  Emerging Market Equities ( $EEM) reversed the prior weeks win and led to the downside.  U.S. and Development Market Bonds ( $IEF, $BNDX ) fell to bearish bias after a strong move in long-dated interest rates, while the US Dollar ( $DXY ) moved up to neutral bias.

Performance comparison of major asset class ETFs ($USO, $IBIT, $GLD, $SPY, $VEA, $EEM, $IEF, $BNDX, $PCY, $DXY) showing 1-week, 4-week, and bias-shift returns relative to the U.S. Dollar.

Asset Class Performance vs. U.S. Dollar – 2026-05-17

S&P500 Sectors

A week after leading to the downside and falling to bearish bias, Energy ( $XLE ) outperformed all other sectors in dramatic fashion, bested the index by than 6%, and reclaimed bullish bias.  Consumer Discretionary ( $XLY ) was the worst sector.  Consumer Staples ( $XLP ) shifted back to neutral bias, while Industrials ( $XLI ) fell to bearish.

Performance comparison of S&P500 sector ETFs ($XLC, $XLY, $XLP, $XLE, $XLF, $XLV, $XLI, $XLB, $XLRE, $XLK, $XLU, $SPY) showing 1-week, 4-week, and bias-shift returns.

S&P500 Sector Performance – 2026-05-17

S&P500 Investing Styles

Large Cap Growth ( $IEF ) led to the upside, one of two outperformers.  Small and Mid Cap Value ( $IWN, $IJJ ) tied for the worst performance, though High Beta, Mid Cap Growth, and Defensives ( $SPHB, $IJH, $POWA ) weren't far behind. There were no bias changes.

Performance comparison of investment style ETFs ($SPHB, $SPLV, $IWO, $IJH, $IWF, $OEF, $IWN, $IJJ, $IWX, $MTUM, $QUAL, $SPHD, $POWA, $SPY) showing 1-week, 4-week, and bias-shift returns.

Style Performance vs. S&P500 – 2026-05-17

COMMENTARY

Markets

The jump in inflation data ( more below ) sent interest rates up, particularly on the long-end of the curve, with renewed fears of a "higher for longer" environment.  30-year U.S. Treasuries hit 5.12% on Friday, the highest level since July of 2007.  Resurgent oil prices and a stronger dollar added to the downward pressure on other asset classes.

According to the International Energy Agency ( IEA ), the crude oil in storage tanks and tanker ships is dwindling at a record pace.  They warned that even with a reopened Hormuz , the market could remain undersupplied until October and raising probabilities of global shortages.

Macroeconomic Data and Policy

CPI inflation hit +3.8% in April; up 1.5% verses last years April reading of +2.3%!  That's a big move.  Interestingly, Core CPI was flat during the same time period, showing the impact of food and energy prices over the past 12 months.

It was the PPI reading that surprised market participants, hitting +6% in April...up from +2.4% at this time last year (yes, that means PPI is more than double last years figure).  Even the month over month was much higher than expected, and that includes an increased to March figures. Core increased to +5.2%, not quite double last years figure of +3.1%, but nothing to celebrate.

Geopolitics

A quiet week in the U.S.-Iran "Maritime Conflict & Ceasefire" saga, as investors focused on the Trump-Xi summit in Beijing.  The meetings generated corporate headlines and photo ops, but didn't not result in any major policy agreements...but be on the lookout for social media diplomacy nonetheless.

EYES ON THE HORIZON

This week is light on high impact news: FOMC meeting minutes on Tuesday.  Lower impact data sets includes pending home sales, the Philly Fed Manufacturing Index, and Flash PMI.
  • Monday: --
  • Tuesday: FOMC Meeting Minutes
  • Wednesday: --
  • Thursday: --
  • Friday: --

Best to Your Week!

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Content Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis (FRED), Hedgeye, StockCharts.com, TradingEconomics.com, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics.
Price and Volume charts provided courtesy of stockcharts.com.

Performance Methodology: All sector performance data is sourced from ThinkorSwim and reflects price‑only returns calculated using end‑of‑week closing data. Bias classifications follow a proprietary Invest Safely, LLC model and update only when trend conditions meet predefined thresholds. All calculations are consistent across every chart on this page.

Disclaimer: Invest Safely, LLC is an independent investment research and online financial media company. Use of Invest Safely, LLC and any products available through Invest‑Safely.com is subject to our Terms of Service and Privacy Policy.

Not a recommendation to buy or sell any security.

Looking for more information on the Stock Market Outlook Signals? You'll find it here:



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Hypothetical Presentations:
Any referenced performance is “as calculated” using the referenced funds and has not been independently verified. This presentation does not discuss, directly or indirectly, the amount of the profits or losses, realized or unrealized, by any reader or contributor, from any specific funds or securities.
The author and/or any reader may have experienced materially different performance based upon various factors during the corresponding time periods. To the extent that any portion of the content reflects hypothetical results that were achieved by means of the retroactive application of a back-tested model, such results have inherent limitations, including:
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Past performance may not be indicative of future results. Therefore, no one should assume that future performance will be profitable, or equal to any corresponding historical index.
The S&P 500 Composite Total Return Index (the "S&P") is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. Standard & Poor's chooses the member companies for the S&P based on market size, liquidity, and industry group representation. Included are the common stocks of industrial, financial, utility, and transportation companies. The S&P is not an index into which an investor can directly invest. The historical S&P performance results (and those of all other indices) are provided exclusively for comparison purposes only, so as to provide general comparative information to assist an individual in determining whether the performance of a specific portfolio or model meets, or continues to meet investment objective(s). The model and indices performance results do not reflect the impact of taxes.

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