The S&P 500 (Index: SPX) rose 0.8% above its previous week's close to end the trading week at 7,473.45 on Friday, 22 May 2026 as investors went into the Memorial Day holiday weekend.

In doing so, the index confirmed that stock prices have fully recovered from the Iran war impact. We find the trajectory of the S&P 500 falls very close to the central trend line of the redzone forecast range we added to the alternative futures chart back on 23 February 2026, several days ahead of when the geopolitical event began. For us, that timing has been fortunate because the redzone forecast range has been able to function as a counterfactual projection of how the S&P 500 would have changed if the Iran war geopolitical event had never happened.

So for the trajectory of stock prices to fall so neatly near the middle of that forecast range now that we're coming to its end is a strong confirmation the negative shock of the geopolitical event upon them has fully waned. Here is the latest update of the alternative futures chart that shows that outcome:

The redzone forecast range is based on the assumption investors would primarily focus on 2026-Q2 in making the decisions that set the trajectory of stock prices throughout its run. The Iran War geopolitical event didn't alter that focus throughout this period, but rather, added noise on top of the signal provided by the dividend futures-based model we use to forecast the S&P 500's future.

There are other factors that affect both the signal and noise investors consider in their decision making, which is provided from the random onset of new information. Here are the past week's market-moving headlines.

Monday, 18 May 2026

• Signs and portents for the U.S. economy:
• China to buy at least $17 billion in US agricultural products annually, White House says
• Explainer: What do China's new US farm purchases mean for global trade?
• White House gets small rare earth win, but China's export regime is here to stay
• Trump returns from China with stability and a stalemate
• Oil prices rise 3% to two-week high on Iran war supply concerns
• How India's cooking fuel shortage is driving up California's gas prices
• Trump says he’s postponing ‘scheduled attack of Iran tomorrow’ at Middle East leaders’ request
• Former Fed minions claim size doesn't matter for some reason:
• Former Fed officials say size may not matter on balance sheet
• Bigger trouble developing in China:
• China's economy loses steam at start of second quarter
• "Shockingly Bad" Chinese Econ Data Stuns Wall Street, Sparks Hard Landing Concerns
• China's April oil throughput hits lowest since August 2022, inventories rise
• China's property investment extends decline in January-April
• Wall Street finished mixed as tech slid ahead of Nvidia earnings
• Nasdaq leads equity losses with oil, borrowing costs in focus
• Nasdaq posts back-to-back losses as Micron’s decline weighs down tech sector
• As bond yields surge, investors grow wary of a global spending crunch

Tuesday, 19 May 2026

• Signs and portents for the U.S. economy:
• US mortgage rates rise to 6.56%, MBA says
• Oil prices fall as Trump pauses Iran attack plans
• Fed minions told to stop bitterly clinging onto assets they bought, expected to avoid rate hikes in 2026:
• Warsh details first round of asset divestments
• U.S. Fed to avoid cutting rates this year; economists still say war-driven inflation is transitory
• Bigger trouble developing in China:
• China state refiners slash throughput on supply disruption, weak margins
• BOJ minions rethinking plan to reduce Japanese bond holdings as JapanGov minions gear up to borrow more:
• Japan's solid first-quarter GDP faces reality check as Iran war threatens economy
• Exclusive: Japan's extra budget to include funding from fresh debt
• BOJ could temper its taper as bond wobbles rattle markets
• Bigger trouble avoided in Eurozone:
• EU prepares to cut US import duties to avoid Trump tariff hike
• Wall Street closed lower as Treasury yields jumped amid inflation fears
• Wall St ends lower as inflation worries push up yields

Wednesday, 20 May 2026

• Signs and portents for the U.S. economy:
• The AI bots are coming and the young are booing, not applauding
• As cocoa prices melt down, real chocolate is making a comeback
• Oil prices slide after Trump says US-Iran negotiations in 'final stages'
• Iran deal looks like a 30-day ceasefire extension - Eurasia Group
• Tankers exit Strait of Hormuz with 6 million barrels of crude oil
• Low unemployment streak revives debate over job market's new floor
• Fed minions outed for hiding their growing excitement for rate hikes:
• Fed minutes show more policymakers open to a rate hike
• Fed's Paulson says current policy appropriate, but 'healthy' to consider extended hold or hikes
• Bigger trouble, no stimulus developing in China:
• Exclusive: US not in a hurry to extend China trade truce, Bessent says
• China leaves lending benchmarks unchanged for 12th month in May
• BOJ minions coordinating with US on plan to hike Japan's interest rates:
• Bessent's support for BOJ may clear political hurdles for June hike
• Bigger trouble developing for the Eurozone, ECB minions gearing up to hike Eurozone interest rates:
• Europe must break China's grip on rare earths pricing to spur investment, sector body says
• ECB June rate hike case is nearly sealed but July is fully open, sources say
• Wall Street ended higher as investors eye possible U.S.-Iran deal and Nvidia earnings
• Wall St climbs 1% with chip stocks rallying before Nvidia results
• Only two sectors are driving the S&P 500 bull market higher since 2022

Thursday, 21 May 2026

• Signs and portents for the U.S. economy:
• US manufacturing activity rises to four-year high in May, S&P Global survey shows
• US energy storage additions hit a first-quarter record, report shows
• Oil prices close 2% lower on uncertain prospects for US-Iran deal
• Oil market could hit 'red zone' in July-August, IEA chief says
• Fed minions finding other things to worry about:
• Some Fed officials and staff are fretting about state of financial markets
• Fed proposes limited payment accounts for fintechs, others
• US Fed officials propose prolonging dollar swap lines to underpin stability
• Fed's Barkin: Policy in good place to respond to ongoing shocks
• BOJ minions / Bigger trouble developing in Japan:
• Japan exports rise for eighth month despite supply disruptions
• Japanese auto exports to Middle East plunge in April as war disrupts shipping
• Bigger trouble developing in Eurozone, ECB minions getting excited to hike Eurozone interest rates:
• Europe's economy hit hard as energy price shock stifles demand
• Euro zone growth set to slow in 2026 as Middle East conflict fuels inflation
• ECB's Rehn sees few signs yet of high inflation taking root
• S&P 500, Nasdaq eke out gains in volatile trading session
• Wall St indexes end slightly higher as investors focus on Mideast peace hopes

Friday, 22 May 2026

• Signs and portents for the U.S. economy:
• US labor market shows resilience in face of war; housing still subdued
• Oil prices rise as investors doubt US-Iran peace talks breakthrough
• Fed minions backing off rate cut plans as new chief minion starts work:
• Fed's Waller's ready to axe 'easing bias,' says rate-cut talk now is 'crazy'
• Kevin Warsh is sworn in as Federal Reserve chair
• Level-setting the Warsh Fed, in Warsh's own words
• Bigger trouble developing in China:
• Chinese Refining Rates Unexpectedly Plunge To All-Time Lows As Economy Falls Off A Cliff
• China shipped a little fuel to Southeast Asia in April but curbs still bite
• China kept building its crude stockpile in April despite Iran crisis
• "Huge Shock": China Launches Crackdown On Cross-Border Stock Selling To Block Capital Outflows
• BOJ minions get core inflation data that's too low, look to energy shock to justify rate hike plans:
• Japan's core inflation hits 4-year low, rebound eyed on energy shock
• Eurozone minions admit Eurozone economy not heading to good place:
• EU in stagflationary trend, must not risk fiscal crisis, ministers say
• ECB minions thinking harder about ditching their perfectly positioned monetary policy to hike Eurozone interest rates:
• ECB will have to respond to inflation increase, EU's Dombrovskis says
• S&P 500 finishes week higher with nine sectors close in green
• Wall Street rises, Dow hits record high as Middle East hopes lift sentiment

The CME Group's FedWatch Tool moved up the expected timing of a quarter point increase in the Federal Funds Rate to 28 October (2026-Q4). The FedWatch tool also now anticipates another quarter point rate hike will come on 28 April (2027-Q2), with a strong probability its timing could also move earlier.

The Atlanta Fed's GDPNow toolestimate of real GDP growth for the U.S. economy in the current quarter of 2026-Q2 increased to +4.3%, up from the +4.0% it projected a week earlier.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull and bear who are at Indianapolis watching cars labeled 'Dow', 'SP 500', and 'NASDAQ' race around the track".