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Technology and space ETFs led May's rally amid AI and SpaceX IPO excitement.
Junk bond and meme-stock ETFs gained as investor risk appetite strengthened.
Bitcoin miner ETFs climbed on AI infrastructure optimism despite weak Bitcoin prices.
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 a 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 current monetary policy is “in a good place” to address risks stemming from the conflict with Iran.
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 persistent.
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.
Winning ETF Areas of the Month
Technology
Roundhill Memory ETF (DRAM - Free Report) – Up 63.7% (as of May 28, 2026)
Memory stocks continue to soar higher lately. Memory chips — crucial for smartphones, laptops and other consumer electronics — are a critical component of artificial intelligence data centers and servers.
Roundhill Space & Technology ETF (MARS - Free Report) – Up 56.3%
Space stocks have been red hot lately, particularly amid anticipation surrounding SpaceX’s IPO, which could become the biggest public offering ever. The Wall Street Journal recently reported that the space company is aiming to go public on June 12 and raise as much as $80 billion, targeting a valuation of about $2 trillion. Elon Musk’s ambition to build data centers in space is helping drive the SpaceX’s IPO plans. At the same time, the IPO news has been acting as a catalyst for the entire space sector (read: Space Stocks Surge as SpaceX IPO Frenzy Builds).
The Roundhill Meme Stock ETF seeks to provide capital appreciation. Meme stocks represent a unique force in today’s markets, where retail participation and rapid sentiment shifts can drive extreme volatility.
The underlying Indxx Bitcoin Miners Index measures the performance of global Bitcoin mining companies that generate the majority of their revenue from Bitcoin mining activities or mining-related hardware, software, services, or projects.
Bitcoin miner stocks jumped in May, as investors focused on miners’ diversification into AI and high-performance computing (HPC) infrastructure businesses. Optimism surrounding data-center demand, improving operational efficiency and expectations of future revenue streams beyond crypto mining boosted sentiment toward the sector.
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"Sell in May" Flops in 2026: 4 Winning ETF Areas
Key Takeaways
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 a 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 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 persistent.
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. First-Quarter GDP Growth Revised Lower
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.
Winning ETF Areas of the Month
Technology
Roundhill Memory ETF (DRAM - Free Report) – Up 63.7% (as of May 28, 2026)
Memory stocks continue to soar higher lately. Memory chips — crucial for smartphones, laptops and other consumer electronics — are a critical component of artificial intelligence data centers and servers.
A supply crunch and rising prices in the memory chip market are expected to continue through 2027, according to a leading semiconductor industry executive, as mentioned on CNBC (read: Tap the Super-Hot Memory Market With These ETFs).
Space Technology
Global X Space Tech ETF (ORBX - Free Report) – Up 59.4%
Roundhill Space & Technology ETF (MARS - Free Report) – Up 56.3%
Space stocks have been red hot lately, particularly amid anticipation surrounding SpaceX’s IPO, which could become the biggest public offering ever. The Wall Street Journal recently reported that the space company is aiming to go public on June 12 and raise as much as $80 billion, targeting a valuation of about $2 trillion. Elon Musk’s ambition to build data centers in space is helping drive the SpaceX’s IPO plans. At the same time, the IPO news has been acting as a catalyst for the entire space sector (read: Space Stocks Surge as SpaceX IPO Frenzy Builds).
Meme Stocks
Roundhill Meme Stock ETF (MEME - Free Report) – Up 49.4%
The Roundhill Meme Stock ETF seeks to provide capital appreciation. Meme stocks represent a unique force in today’s markets, where retail participation and rapid sentiment shifts can drive extreme volatility.
Digital Economy
Grayscale Bitcoin Miners ETF (MNRS - Free Report) – Up 51.1%
The underlying Indxx Bitcoin Miners Index measures the performance of global Bitcoin mining companies that generate the majority of their revenue from Bitcoin mining activities or mining-related hardware, software, services, or projects.
Bitcoin miner stocks jumped in May, as investors focused on miners’ diversification into AI and high-performance computing (HPC) infrastructure businesses. Optimism surrounding data-center demand, improving operational efficiency and expectations of future revenue streams beyond crypto mining boosted sentiment toward the sector.