A trader works at his post on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., June 1, 2026. REUTERS/Brendan McDermid
Index Performance
U.S. broad-based indices finished inched higher into greener pastures. Nasdaq ticked up 2.39%. The Russell 2000 climbed 1.77%, followed by the S&P 500 Total Return Index (+1.44%), and Dow Jones Industrial Average (+0.91%).
Broad-based fixed income indices also ended the period in a sea of green. The FTSE Municipal Tax-Exempt Investment Grade Bond Index rallied 0.20%, and the FTSE High Yield Total Return Index ticked 0.16% higher. The FTSE U.S. Broad Investment Grade Bond Total Return Index dipped 0.09%.
Macro Viewpoint
Crude oil prices dipped again to close out May, with Brent crude reaching lows of $92 per barrel. The decline points to rising hope that the conflict between the United States and Iran is finally winding down. Despite military conflict still rising in Iran, the two nations have discussed peace negotiations, with the U.S. pushing for the Strait of Hormuz to open to resume the export of crude oil. However, the peace deal rests in the hands of President Donald Trump, who stated, “If it’s not a great deal, we’re not making it.” If the deal does pass through, we can expect a slow recovery as economists wait for further proof that the truce will last. For now, the market is anxiously waiting to see what will happen.
On the Yield Front
Yields were mixed following the news. The two and five-year Treasury yields dipped 1.1 bps, while the 10-year inched lower by 0.2 bps. On the other hand, the 30-year yield climbed 0.8 bps.
Fund Flows by Asset Type
For the LSEG Lipper Fund Flows week ending May 27, 2026, investors continued to favor lower-risk assets instead of high cyclical growthier assets. From a snapchat viewpoint, Fixed Income Funds attracted roughly $10.7bn in net flows, U.S. Money Market Funds captured $8.4bn, and U.S. Equity Funds saw redemptions of nearly $2.7bn. Commodity and U.S. Mixed-Assets funds posted smaller outflows, and Alternatives recorded modest flows just shy of $600m. Despite the market rallying to new highs, the pattern is clear that capital is rotating into fixed income and cash, due to elevated uncertainty within geopolitical markets.
U.S. Fixed Income Funds account for the bulk of the week’s inflows. U.S. Taxable Bond Funds led with approximately $8.4bn, supported by U.S. General Domestic Taxable Fixed Income ($2.9bn) and U.S. Short/Intermediate Government and Investment-Grade Funds pulled in together $4.3bn. With the taxable bond funds universe, High Yield Funds was the lone exception, posting a modest outflow of $45m. Emerging Market Debt and World Income Funds gathered in 365m and 101.48m, respectively.
U.S equity flows were more nuanced than the overall market suggests. The outflow within U.S. Equity Funds was mainly driven by U.S. Large-Cap Funds, which lost more than $5.3bn. U.S. Small-Cap, Emerging Markets, and International Funds each shed more than $900m. These declines were offset by inflows on a horizontal basis across the equity spectrum. U.S. sector, equity income and multi-cap funds gathered $3.7bn, $1.4bn, and $1.1bn, respectively.
