Wall Street had a spectacular May, with the S&P 500 gaining about 4.9%, the Dow Jones adding about 2.1% and the Nasdaq-100 surging about 10% over the past month (as of May 28, 2026) on U.S.-Iran truce hopes (read: 5 ETF Areas Trading at a 52-Week High).

Oil Plunges in May

Oil dropped in the month as the United States and Iran tentatively agreed to extend the ceasefire by 60 days, with Brent set for the biggest monthly drop since 2020 on optimism that flows through the Strait of Hormuz may resume, per Bloomberg, as quoted on Yahoo Finance.

Upbeat Earnings Season

The month was full of earnings releases. The Q1 earnings season has come to an end for nine of the 16 Zacks sectors, with results from 462 S&P 500, or 92.4% of the index’s membership, already out.

Total Q1 earnings for the 462 S&P 500 companies that reported through May 20, 2026 results are up +21.1% from the same period last year on +10.4% higher revenues, with 79.9% beating EPS estimates and 78.6% beating revenue estimates. This is a better showing from these companies relative to other recent periods.

Tech & Energy Sectors Flex Muscle

The Tech sector has been enjoying positive estimate revisions for more than a year now, so the sector’s positive revisions trend is basically more of the same. The Energy sector’s improved earnings outlook is a direct result of the Iran war, as is the upgraded earnings outlook for parts of the Basic Materials sector, particularly the Chemicals industry.

Inflation Heats Up

The Federal Reserve’s preferred inflation gauge surged to a three-year high in April. The Personal Consumption Expenditures Index rose 3.8% in April as the conflict in the Middle East pushed oil prices higher.

That was in line with expectations and up from 3.5% in March. Excluding volatile food and energy prices, the so-called “core” PCE index was up 3.3%, also matching expectations and up a tenth from 3.2% in March, per a Yahoo Finance article. Still, that’s the highest core reading in two and a half years.

New York Fed President and FOMC Vice Chair John Williams said Thursday that inflation is likely to remain elevated in the coming months, with headline inflation potentially nearing 4% and core inflation staying above 3%.

While Williams expects headline inflation to peak within the next few months, he maintained that the current monetary policy is “in a good place” to address risks stemming from the conflict with Iran.

Goldman Sachs COO John Waldron echoed those concerns, calling inflation the biggest risk facing markets, as quoted on the same Yahoo Finance article.

No Fed Rate Cut in 2026?

Most policymakers continue to support holding interest rates steady for now, though a growing number are unwilling to rule out additional rate hikes if inflation remains high.

Fed Governor Lisa Cook said that she is “prepared to raise rates” if inflation fails to moderate in a “timely manner,” as quoted on the same Yahoo Finance article.

U.S. Q1 GDP Growth Revised Lower Amid Slow Consumer Spending

The U.S. economy grew at an annualized rate of 1.6% in the first quarter of 2026, lower than the initial estimate of 2.0%, reflecting weaker consumer spending and softer business investment.

ETFs in Focus

Against this backdrop, below we highlight a few winning leveraged ETFs of the month of May.

T-REX 2X Long RDW Daily Target ETF (RDWU Quick QuoteRDWU - Free Report) – Up 515.3%

The T-REX 2X Long RDW Daily Target ETF seeks daily investment results, before fees and expenses, of 200% of the daily performance of the Redwire Corporation. The expense ratio of the fund is 1.50%.

Redwire Corp. (RDW Quick QuoteRDW - Free Report) shares gained about 201% over the past month, thanks to strong investor optimism surrounding the space and defense technology sector, growing demand for satellite infrastructure, and continued momentum in government and commercial space programs.

Tradr 2X Long ALAB Daily ETF (LABX Quick QuoteLABX - Free Report) – Up 190.0%

The Tradr 2X Long ALAB Daily ETF seeks daily investment results, before fees and expenses, that correspond to two times the daily performance of the common shares of Astera Labs Inc. The expense ratio of the fund is 1.50%.

ALAB stock rose on AI infrastructure demand and continued optimism for high-speed connectivity and semiconductor-related technologies.

Defiance Daily Target 2x Long KEEL ETF (KEEX Quick QuoteKEEX - Free Report) – Up 286.7%

The Defiance Daily Target 2X Long KEEL ETF seeks daily investment results, before fees and expenses, of two times the daily percentage change in the share price of Keel Infrastructure Corp. The expense ratio of the fund is 1.31%.

Keel Infrastructure stock rose on growing optimism around its shift toward AI and high-performance computing (HPC) infrastructure, and expectations for future data-center leasing deals. Investors have also responded positively to the company’s expanding AI-focused power infrastructure pipeline and improving liquidity position.

Direxion Daily MU Bull 2X ETF (MUU Quick QuoteMUU - Free Report) – Up 188.7%

The Direxion Daily MU Bull 2X ETF seeks daily investment results, before fees and expenses, of 200% of the performance of the common ETF of Micron Technology, Inc. The expense ratio of the fund is 1.01%.

In a historic milestone on May 26, 2026, Micron Technology’s (MU) market capitalization crossed the $1 trillion threshold, driven by an extraordinary 19.3% single-day stock rally that lifted shares to a close of $895.88. This dramatic rally places the memory-chip giant into an elite tier of a few tech titans (read: Tech ETFs to Buy as Micron Technology Joins the $1 Trillion Club).

Defiance Daily Target 2X Long RKLB ETF (RKLX Quick QuoteRKLX - Free Report) – Up 217.3%

The Defiance Daily Target 2X Long RKLB ETF seeks daily leveraged investment results of two times the daily percentage change in the share price of Rocket Lab USA, Inc. The expense ratio of the fund is 1.31%.

RKLB shares soared due to strong investor enthusiasm around the booming space sector, upbeat earnings, and growing optimism tied to a potential SpaceX IPO.