05/25/2026 ValuEngine Weekly Market Summary & Commentary

U.S. equity markets were mixed this week, with broader ETF performance showing limited movement across the major benchmarks and sectors. The NASDAQ 100 ETF (QQQM) slipped modestly, while the S&P 500 ETF (SPYM) was nearly flat, indicating a pause in broader market momentum. Sector performance was uneven, with Energy (XLE), Consumer Staples (XLP), and Health Care (XLV) posting gains, while Materials (XLB), Industrials (XLI), Utilities (XLU), and Real Estate (XLRE) moved lower. Despite the muted ETF backdrop, select individual stocks delivered strong 30-day gains, led by Sterling Infrastructure (STRL), Intel, Micron Technology (MU), Seagate Technology (STX), STMicroelectronics (STM), and United Microelectronics (UMC), suggesting that stock-specific momentum remained highly concentrated in infrastructure and semiconductor-related names.

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Happy Memorial Day!  We honor and will always remember our fallen heroes in service to their country.

We’ll start this week’s strategy note with this factoid about Memorial Day week’s trading since SPY (the ETF mirroring the S&P 500) started trading in 1993.

During the week following Memorial Day since inception, the SPDR S&P 500 ETF Trust (SPY) has historically demonstrated a consistent positive short-term seasonal bias. On average, the four-day trading period following Memorial Day, measured from Tuesday’s opening bell to Friday’s closing bell, has produced a net average return of +0.38% across all years.

Obviously, this does not mean that the return for the next four days in 2026 will also be positive.  It’s just interesting to know the trend. A quick look shows that it has applied to almost 3/4 of comparable weeks.  In the last two weeks, the market has nudged up slightly in what seems to be an unusually low-volatility stasis period.  No one knows how or if this week’s latest updates about what could be a peace agreement will affect things during a week where most thoughts about mid-year earnings reports are speculation.

To the extent that a historical calendar effect might hold this year, June is not an especially prosperous time to add to S&P 500 stock positions.  Since 1993 along with September and February, it is one of only three months whose average monthly price changes have been negative; -0.02%, ranking it 10th among the 12 months.  Moreover, the “win rate” or percentage of non-negative months has been just 48.5%, making it the second lowest month and one of just two with a below-50% historical incidence.

Add that to the current economic doldrums characterized by rising inflation that experts predict will soar higher for longer and flatten GDP forecasts for the rest of 2026.  Paraphrasing the historically inaccurate “Sell in May” quote, it seems that in the past traders going away in June haven’t been missing much, a trend likely but not guaranteed to continue this year.  The only good news is that there have been only two historical months of June that showed worse than a -5% change.  A crash is not something that historically has characterized June.

In our next full length blog to be posted in the next few days, we discuss sectors and individual stocks most likely to be hurt or helped by the “doldrums” economic environment with rising inflation.  Historically, the best industry sectors to handle such an environment, using the analogous State Street Select Sector SPDR ETFs, include: consumer staples (XLP); energy (XLE); financial (XLF); and materials (XLB).  A newer sector that generally outperforms the declining-to-flat market is real estate (XLRE).  Our flagship ValuEngine ratings and model forecasts do not agree.  Our only buy-rated sector is still technology (XLK).  XLK has a 5 (Strong Buy) rating.  Somewhat unusually, SPY is preferred to the other nine sector SPDRs with a 4 (Buy) rating.

Nevertheless, we do have some buy-rated stocks that are not grossly overvalued and with relative low market-move sensitivities (betas)  that are also in buy rated overall sectors that historically have fared relatively better during this type of environment.   Our top rated consumer staples stocks are Vita Coco (COCO) with a 5 rating and Archer Daniels Midland (ADM) with a rating of 4.  Of the two, ADM fits better with traditional portfolios with a beta of 0.57, a dividend yield of 2.7% and a forward P/E of 15.7.  COCO does not pay a dividend and has forward P/E of 40.

Our two top energy picks that fit beta, dividend and valuation criteria are: Marathon Petroleum (MPC) and MLP Targa Resources (TRGP) , both rated 5.  Three 5-rated financial sector companies currently fitting the criteria are Citigroup (C), Societe Generale ADR (SCGLY) and Wisdom Tree (WT).   In the materials sector, our forecast model still likes some of the more profitable precious metal miners including 5-rated Canada-based Anglico Eagle Mines (US ticker: AEM)  and Pan American Silver (PAAS).  In the absence of 5-rated stocks meeting in our criteria in Real Estate, we identify our top qualifying 4-rated REIT stocks,  Welltower (WELL) and Ventas (VTR).  As usual, there is no substitute for your own due diligence.  These screens are intended as guides for further research.

In a way, you could call our viewpoints split on continuing to buy and sell stocks and ETFs in the month of June.  The forecast model still believes that the tech-top-heavy major index ETFs QQQ representing the Nasdaq-100 and SPY will continue to outperform and is therefore implicitly bullish on the market.  Our macro and historical analyses are more apprehensive, suggesting a holding pattern until more tangible and specific data are available.