Market Insights Recap — Week of June 1, 2026

Hi, I'm Steve Orr, Chief Investment Officer for Texas Capital's Private Bank.

A May to remember and a June to enjoy. We hope. So, big picture. Moderate economic growth. Think second gear. May's jobs data this Friday is going to show solid jobs and study unemployment. And we'll look at stocks run of nine weeks. It can go higher. 

So what affects everybody? Rates and inflation. A nice rally in bonds over the last two weeks. Longer rates dropping about 2/10 of 1%. But the intermediate trend over the next couple of years is for higher rates. Now spreads for corporate and mortgage bonds. They're really tight. So remember, borrow when you can not when you have to.

Now turning to inflation, the Fed's personal consumption expenditure inflation gauge. That's their favorite. It's running at a 4.8% run from January 1. That's the highest in three years. It's going up. Now services and goods prices. They were going up before the Iran versus everybody war got going and jacked up fuel prices. Every inflation cycle since World War One has had an echo peak about three to four years later. And remember, June 2022, CPI was running at 9%. Here we are four years later headed above 4%. So just like bond yields, expect higher for longer on inflation. 

Now this Friday's job report shows unemployment steady 4.3%. Nonfarm payrolls estimated around 80,000 net new jobs last month. It's a second gear economy in the first quarter, but it's steadily accelerating here in the second quarter. Now, stocks like a growing economy, and the artificial intelligence spending boom is helping the stock market ignore higher oil prices and interest rates. 

How much longer can the current rally last? Sorry, I don't know. But I do know history rhymes, and history tells us that big runs like we've seen in software names, do tend to reverse at about the same speed. Overall, valuations are back to last year's levels. The trend is up. The sentiment is optimistic, but not too frothy. June's usually a good month for stock returns. The S&P 500 has run higher for nine straight weeks. A run of nine weeks has happened ten times in the indexes history, and in nine of those ten, stocks were higher three and six months later. Our dashboard remains green. We're wary of a late summer consolidation. Until next time.