The S&P just crossed 7,500. Here's what that does and doesn't tell you.

May was a month of headlines. Stock indices hit fresh all-time highs. Long-term interest rates spiked to levels not seen in close to two decades. And for the first time since 2018, the Federal Reserve has a new Chair.

Plenty to digest. Let's walk through what actually matters for your plan.

The market kept climbing

All three major U.S. indices ended May at record highs:

• S&P 500: up 5.1%, closing above 7,500 for the first time
• Nasdaq: up 8.4%
• Dow Jones: up 2.8%

Through the end of May, the S&P alone had set 22 new highs this year. All figures reflect past performance for the month of May 2026. Past performance is not indicative of future results.

Here's the thing about new highs.

They feel like a signal that something dramatic is happening. Usually they're not.

Markets tend to drift upward over long stretches of time, which means they spend a lot of that time at or near records. The level of any one index tells you very little about what comes next.

What does matter is what's underneath.

Corporate earnings have continued to grow at a healthy pace, and consensus estimates point to further growth in the coming year. Historically, periods of sustained earnings growth have been associated with market resilience, though past patterns are not a guarantee of future results.

Valuations are another story.

The S&P 500 is trading at about 20.9 times earnings. That's within the range of the past few years, but it's still well above long-term historical averages.

Elevated valuations don't predict what happens over the next year or two. They do suggest that maintaining balance across different parts of the market warrants attention when prices are at these levels.

Interest rates jumped, then settled

While stocks were climbing, the bond market faced headwinds.

The 30-year Treasury yield touched 5.18% in May, its highest level in close to two decades. The 10-year climbed to 4.4%. Both moderated by month-end as oil prices eased, but the broader message was clear: investors are reassessing how long rates may stay elevated.

What pushed yields up?

Inflation reports came in above expectations. Headline CPI ran at 3.8% year-over-year and core CPI sat at 2.8% according to the Bureau of Labor Statistics. When prices climb, investors typically demand more yield to be compensated for the reduction in purchasing power.

The Fed funds futures market has now shifted from expecting further rate cuts to pricing in at least one rate hike by the middle of 2027.

Higher rates affect almost everything.

Mortgages. Car loans. Business financing. Even gas prices tie into the same inflation story driving yields higher. They also change how future cash flows are valued today, which is part of why some areas of the market have been more volatile than others.

There is an offsetting consideration for bond investors.

Yields are now offering income levels not seen in many years. For a diversified portfolio, that income can be a notable factor relative to the past decade.

That said, if rates rise further, bond prices would decline, and existing bond holdings could still face negative total returns. Duration risk warrants attention in this environment.

A new face at the Fed

Kevin Warsh was sworn in as Federal Reserve Chair in May, succeeding Jerome Powell.

Warsh is not new to the Fed. He served on the Board of Governors during the 2008 financial crisis.

Markets see him as a known quantity with real monetary policy experience. He is also viewed as a reformer, which introduces some uncertainty about how the Fed will operate under his leadership.

His Senate testimony emphasized two themes:

• Monetary policy independence is essential
• Policymakers have to act in the country's interest, not in response to political pressure

He has historically leaned toward managing inflation risks, which is worth noting given the current environment.

Whatever direction Warsh takes the institution, the underlying challenge is the same one Powell faced.

Inflation is still running above target. The labor market has been mixed.

Supporting jobs would normally argue for lower rates. Containing inflation argues for tighter conditions.

There is no clean answer.

History shows that the U.S. economy has grown across the tenures of many different Fed Chairs, under many different political administrations.

Earnings growth, productivity, demographics, and innovation are the primary drivers of long-run returns.

Changes at the top of the Fed can generate short-term uncertainty, but they rarely alter these long-term fundamentals.

What this means for your plan

If you're within ten years of retirement or already there, this is the kind of month that can pull your attention in the wrong direction.

The headlines may argue for action.

The fundamentals argue for staying grounded in a plan built around your actual goals.

Does your plan account for higher rates, sticky inflation, and the occasional leadership change in Washington? If it doesn't, that's a conversation worth having before the next market surprise, not after.

A few things worth thinking about right now:

Revisit your bond allocation. Income that wasn't available five years ago may be available now. At the same time, if rates continue to rise, bond prices would fall further. Make sure your fixed income exposure reflects both your income needs and your tolerance for price volatility.

Check your concentration. If a handful of large technology names are driving a large share of your equity gains, that's worth knowing. Concentration in a small number of positions carries risk in both directions.

Pressure-test your income strategy. If sticky inflation is affecting your withdrawal plan, that may be a signal to revisit the income strategy itself, not necessarily a reason to overhaul your investments.

The Bottom Line

May brought new milestones, new uncertainty, and a new Fed Chair.

Headlines are likely to keep coming.

​Research on investor behavior generally suggests that maintaining a long-term plan through periods of volatility has been associated with better outcomes than reacting to short-term news, though individual results vary.

If you haven't reviewed your plan recently, this is a reasonable moment to do it.

Not because something is wrong.

Because the landscape has shifted, and your strategy should keep up.

Have any questions, comments, or feedback? Just hit reply! We personally go through and answer each message.
​
Thanks for reading!
​
​Keeping wealth in focus,

The MY Wealth Management Team

Sources

1. U.S. Treasury, Interest Rate Statistics: home.treasury.gov/policy-issues/financing-the-government/interest-rate-statistics

2. CME Group, FedWatch Tool: cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

3. Bureau of Labor Statistics, Consumer Price Index: bls.gov/cpi

4. AAA Gas Prices: gasprices.aaa.com

5. Federal Reserve, About the Fed: federalreserve.gov/aboutthefed/section10.htm

6. S&P 500 index data: Clearnomics, Inc. / Standard & Poor's

7. Real GDP data: Clearnomics, Inc. / Bureau of Economic Analysis, NBER

8. Corporate earnings estimates: Clearnomics, Inc. / LSEG

This material is for informational purposes only and is not intended as investment, tax, or legal advice. The performance figures cited reflect past performance for the month of May 2026 and are not indicative of future results. Charts sourced from Clearnomics, Inc. and are used with permission. Market data sourced from Clearnomics, Inc., Standard & Poor's, LSEG, the Federal Reserve, the Bureau of Economic Analysis, and other third-party providers; MY Wealth Management has not independently verified all figures. Please consult a qualified professional regarding your specific situation. MY Wealth Management, Inc. is a Registered Investment Adviser.