Monthly Review - May 2026
In brief
The markets
5.1%
0.8%
3.7%
2.9%
3.3%
3.3%
0.3%
4.3%
6.2%
Source: Bloomberg 29.05.2026, returns in local currency
Top stories
High level summit
The presidents of China and the US met for a long-awaited summit in Beijing. The meeting had promised much in terms of closer ties, including trading links. Yet there were no major announcements of new contracts for US companies, although reportedly Boeing won an order for 200 planes with General Electric engines. The US president was accompanied by an entourage of tech leaders, hoping to showcase US tech dominance. However, despite the presence of CEO Jensen Huang, one of Nvidia's gaming chips was banned during the visit, in a clear show of China's support for domestic chip producers.
Hot demand for AI tech
Forecasts of strong demand growth within the AI tech sector continued to drive equity markets in the US and Asia higher. South Korea's Kospi index, heavily exposed to semiconductor chip stocks, has tripled within the last 18 months. In a record-breaking run, an ETF investing in AI chipmakers, with the stock market ticker DRAM, saw inflows of US$10 billion just 50 calendar days after launch. The fund holds over 70% of its assets in just three stocks, SK Hynix, Samsung and Micron Technology, sparking concerns of over-concentration on a single investment theme.
Lift-off for SpaceX
The prospectus was launched for the Nasdaq listing of SpaceX, the space rocket to AI group founded and controlled by Elon Musk. Although only a fraction of the stock is due to be listed, it would become the biggest ever IPO with a total company valuation of US$1.75 trillion. This would make its founder the world's first trillionaire. The lengthy prospectus describes huge plans, including the creation of solar powered AI data centres in space, although future profits are not guaranteed. Elsewhere both OpenAI and Anthropic joined the queue of AI companies planning to raise money via a stock market listing later this year.
Continuous solar power
An International Renewable Energy Agency (Irena) report claims that the latest advances in battery storage constitute a tipping point in the global transition towards 24/7 renewable power generation. This would successfully upend the longstanding “intermittency” argument, which contends that solar power is unreliable in cloudy conditions. The report describes more competitively priced projects combining wind and solar with battery storage, and advocates a future where renewables supply core “baseload” power, with fossil fuels seen as “backup”. While energy supply restrictions from the Middle East have strengthened the case for renewables, Irena's Director-General Francesco La Camera acknowledges that China's dominance in the global battery supply chain might itself create a new import dependency risk.
On the radar
After a quiet month in May, major central banks look set to become increasingly focused on fighting inflation, as they attempt to counter mounting energy-driven stagflationary pressures, fuelling expectations of rates hikes as early as June.
Hopes for a reset in trans-Atlantic ties will be in focus as the US president heads to Évian-les-Bains, where France will host the leaders of Canada, Germany, Italy, Japan and the UK for the 52nd G7 Summit in mid-June.
While a government-mediated pay deal in Korea might have averted an 18-day strike by 48,000 Samsung Electronics employees, labour tensions are growing across the chip sector, with workers demanding better pay as the AI boom fuels soaring tech and semiconductor profits.