Prime Weekly: 01-06-2026

U.S. equity markets closed May at record levels, with the Dow Jones Industrial Average topping 51,000 for the first time. The S&P 500 posted its ninth consecutive winning week, capping a 5.2% monthly gain, while the Nasdaq Composite surged 8.4% in May as demand for artificial intelligence continued to underpin market momentum.

For the week, the Nasdaq gained 2.4%, led by information technology, while the S&P 500 added 1.4% and the Dow rose 0.9%.

Technology shares outperformed following strong quarterly results and upbeat guidance from Dell Technologies and Snowflake. Dell posted its best single-day gain on record — a 32% jump — after raising its outlook, citing robust demand for AI-capable hardware infrastructure.

U.S. Treasury yields pulled back after reports of an interim U.S.-Iran agreement raised hopes for a reopening of the Strait of Hormuz. The 10-year yield fell to approximately 4.44% by month-end, easing from recent highs as the geopolitical risk premium faded from energy markets.

Q1 GDP estimate was revised down to 1.6% from 2.0%, reflecting softer investment and consumer spending, with goods prices rising 1.2% over the period.

The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose 3.8% year-over-year in April — its fastest annual pace since mid-2023. The acceleration was driven largely by rising energy costs tied to geopolitical tensions in the Middle East, specifically the ongoing conflict with Iran.

Investor optimism over the latest round of U.S.-Iran negotiations pushed oil prices lower for a second straight week. U.S. crude traded near $88 per barrel on Friday afternoon, down nearly 10% on the week and roughly 16% for the month of May.

Crude Oil climbed on Monday, rising more than 3% as Israel ordered troops further into Lebanon and US-Iran ceasefire negotiations showed little sign of progress.

Indian benchmarks ended the week modestly lower, with the Nifty slipping about 0.6% to 23,548 and the Sensex down roughly 0.7% to 74,776, as geopolitical tensions and crude volatility weighed on sentiment.

The Indian rupee outperformed on Friday its Asian peers, appreciating by 69 paise to close at its highest level since May 8. This marked its strongest single-day gain since April 2, supported by easing crude oil prices, suspected RBI intervention, and optimism around a potential extension of the US-Iran ceasefire.

The May 2026 MSCI Emerging Markets index rebalance triggered approximately ₹8000–8500 crore in passive outflows from Indian equities, with quarterly rebalancing a routine event in February, May, August, and November as MSCI adjusts its index constituents. The rebalancing caused a sharp late-session sell-off on May 29, with the Sensex dropping 1,092 points and ₹5.77 lakh crore in market cap being wiped out, as foreign institutional investors were net sellers, while domestic institutions provided some support to offset the outflows. This was a one-time methodological adjustment, and historically, rebalancing effects are temporary; markets typically recover as the mechanical selling pressure subsides, so there is genuinely nothing to worry about.

Nifty continues to face stiff resistance around the 24000 levels. The short-term trend weakened as the Nifty fell below its key moving averages. On the upside, a breach of 23,800 support is likely to flip into resistance. Friday’s low of 23,484 now marks immediate support; a decisive break below that level would expose the index to the next support placed near 23,260.