The Markets – May 26, 2026

Feeling the pinch of rising prices.

The cost of living is increasing in many places around the world. “The war has sent oil prices soaring and led to shortages of products like jet fuel. Coal prices have also risen as some power companies switch to coal from natural gas to generate electricity. Countries that depend on other fuel sources—from renewables to nuclear power—have been spared some of the economic hardship so far,” reported Avi Salzman of Barron’s

In April, prices in the United States rose at an annual rate of 3.8 percent, with energy prices up 17.9 percent year over year. That was a significant increase from the prior month when prices rose at an annual rate of 3.3 percent, with energy prices rising at a 12.5 percent pace.

For Americans, higher prices have been especially noticeable at the gas pump.

Last Saturday, the average price for regular gasoline was $4.53 per gallon in the United States, and the price of diesel (used by long-haul trucks moving goods across the U.S.) was $5.63 per gallon, according to AAA. Overall, estimates suggest that Americans have spent an extra $20 billion on gasoline due to the war with Iran, reported Enda Curran, Mark Schroers, Ye Xie, and Jorgelina Do Rosario of Bloomberg.

Americans are not feeling optimistic

When economists want to know how people feel about their personal financial situations and the economy in general, they look at consumer sentiment. In May, the University of Michigan’s Index of Consumer Sentiment dropped, reflecting continued concerns about the economy and what may happen over the next year.

“Sentiment is now just below the previous historical trough seen in June 2022. The cost of living continues to be a first-order concern, with 57 [percent] of consumers spontaneously mentioning that high prices were eroding their personal finances, up from 50 [percent] last month,” wrote Surveys of Consumers Director Joanne Hsu.

Last week, solid company earnings and signs of progress toward an agreement with Iran pushed major U.S. stock indexes higher for the eighth week in a row, reported Karishma Vanjani of Barron’s. Yields on U.S. Treasuries eased a bit last week.

S&P 500, Dow Jones Global ex-US, S&P GSCI Gold Index, Bloomberg Commodity Index returns exclude reinvested dividends. The three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

WHAT DO YOU KNOW ABOUT AMERICA’S MONEY MOOD?

While U.S. consumer sentiment is lower overall, not every American household experiences the economy the same way. Some families are stretching to cover basic expenses, while others are buoyed by strong investment returns. Test your knowledge by taking this brief quiz.

1. According to a recent Gallup poll, what financial issue did Americans say was the top problem facing their families this year?
   • a. Student loan payments
   • b. Cost of living/inflation
   • c. Lack of retirement savings
   • d. Credit card debt

2. Seventy-three percent of Americans describe one issue as a “very big problem” in a recent Pew Research Center survey. What was it?
   • a. Unemployment
   • b. Artificial intelligence
   • c. Healthcare affordability
   • d. Stock market volatility

3. Americans experience the economy differently depending on their income level. Teresa Rivas of Barron’s wrote that one factor has helped bolster the finances of many higher-income households. What factor was it?
   • a. Lower mortgage rates
   • b. Falling healthcare costs
   • c. Stock market performance
   • d. Reduced grocery prices

4. According to a recent Gallup survey, what percentage of Americans are moderately or very worried they won’t have enough money for retirement?
   • a. 30 percent
   • b. 48 percent
   • c. 62 percent
   • d. 87 percent

WEEKLY FOCUS – THINK ABOUT IT

“In the history of art there are periods when bread seems so beautiful that it nearly gets into museums.”

― Janet Flanner, Journalist

Answers: 1) b; 2) c; 3) c; 4) c

Warm regards,

Daniel J. Murphy, CFP®
Murphy Wealth Management Group
60 Merritt Blvd., Suite 106
Fishkill, NY 12524

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