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Complete analysis of U.S. stock trends in 2026: S&P 500 and Nasdaq hit new highs, deepening the AI supply chain is the key
In May 2026, the US stocks S&P 500 and Nasdaq both hit record highs. A complete analysis of the driving forces, leading groups, performance of the seven major technology giants, investment risks and how Taiwanese participate in US stocks.
US stocks
S&P 500
Nasdaq
artificial intelligence
semiconductor
Magnificent 7
ETF
Last Updated:2026-05-27
Table of Contents
1. What happened to U.S. stocks in May? Both hit record highs
On May 26, 2026, the S&P 500 and Nasdaq hit all-time closing highs simultaneously. This is not luck on one day, but an accumulation of multiple profits throughout the month. From the beginning of May to the end of May, the Nasdaq gained more than 8% and the S&P 500 gained more than 5%.
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Early May: The Situation In The Middle East Eased + Oil Prices Fell Sharply, And Market Risk Appetite Rebounded
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Mid-May: Technology Stocks Lead Gains As U.S.-China Tariff Expectations Improve After Trump-Xi Meeting
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Late May: Semiconductor Earnings Season Exceeded Expectations, With Nvidia, Micron, And Amd All Reporting Good News
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5/26: S&P 500 And Nasdaq Hit Record Highs Simultaneously
flowchart LR
A[Middle East easing] --> D[Risk preference↑]
B[Sichuan-Xihui Meeting] --> D
C[Semiconductor Financial Report] --> D
D --> E [S&P 500 new high]
D --> F[Nasdaq new high]
2. Why did it go up? Three driving forces
This wave of U.S. stocks reaching new highs is not a bubble speculation, but is supported by substantial fundamentals and policies.
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Driver 1 - Ai Capital Expenditures Continue: Google, Microsoft, Meta, And Amazon'S Ai Capital Expenditures Continue To Increase Instead Of Decreasing, Indicating That Technology Giants Are Still Optimistic About The Long-Term Value Of Ai. These Capital Expenditures Translate Directly Into Semiconductor And Supply Chain Revenue
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Driver 2 — Deepening Of The Semiconductor Supply Chain: The Ai Boom Is No Longer Just An Nvidia Story. Market Funds Are Spreading Deeper Into The Supply Chain - Hbm Memory (Micron), Ai Chip Packaging (Tsmc), Data Center (Arista Networks)
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Driver 3 - Easing Geopolitical Risks: The Situation In The Middle East Has Turned For The Better, And The Sharp Fall In Oil Prices Has Reduced Inflationary Pressures. After The Trump-Xi Meeting, U.S.-China Relations Stabilized In The Short Term, Reducing The Uncertainty Of Technology Export Controls.
3. The latest performance of the Magnificent 7 (seven technology giants)
The trend of U.S. stocks largely depends on the performance of the seven major technology giants. How will their report card look like in the Q1 earnings season of 2026?
| company | Share Price Performance (YTD) | Q1 financial report | AI Layout Highlights |
|---|---|---|---|
| NVIDIA | Leading the gains | Beat | H200 is in short supply, B100 will be launched in the second half of the year |
| Apple | +15%, a new high | Beat | WWDC 6/8 releases Siri 2.0 |
| Microsoft | Steady rise | Beat | Copilot subscription revenue doubles |
| Steady rise | Beat | Gemini 2.0 + Search AI Integration | |
| Amazon | strong | Beat | AWS AI service revenue surges |
| Meta | rebound | Beat | Llama 3 open source model successful |
| Tesla | +32% (from low) | Beat | FSD 1.3 million users + Optimus |
Tip
- The seven technology giants account for more than 30% of the weight of the S&P 500, and their performance directly determines the direction of the market.
- The feature of 2026 is "AI inclusiveness" - not only NVIDIA is rising, but the entire AI supply chain is rising
4. Fed interest rate policy: Is there still room for rate cuts?
The U.S. Federal Reserve's (Fed) interest rate decision is another key factor affecting U.S. stocks.
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Current Interest Rates: Still In The High Range Of 4.5-5%
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Market Expectations: Interest Rates May Be Cut 1-2 Times In The Second Half Of 2026
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Interest Rate Cut = Bullish: Lower Interest Rates → Lower Corporate Borrowing Costs → Higher Support For Stock Market Valuations → Higher Stock Prices
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Risk: If Inflation Picks Up (For Example, Oil Prices Surge Again), The Fed May Suspend Interest Rate Cuts, Which Will Be Detrimental To Highly Valued Technology Stocks
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Indicators To Watch: Statements And Dot Plots After Each Fomc Meeting
flowchart TD
A{Fed next?}
A -->|Interest rate cut| B[Positive: Valuation support↑]
A -->|Maintain|C[Neutral: Waiting for more data]
A -->|Raise interest rates| D[negative: pressure on technology stocks]
B --> E[US stocks continue to rise]
C --> F[Consolidation]
D --> G[Correction retracement]
5. What are the risks for U.S. stocks?
Calmness is most needed when hitting new highs. The following risks cannot be ignored.
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Valuation Risk: The S&P 500 Trades At About 22X Forward P/E, Above The Historical Average Of 17X. If The Company'S Profits Are Not As Good As Expected, The Valuation Will Be Revised
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Ai Bubble Concerns: If Ai Capital Expenditures Slow Down Or Investment Returns Are Not As Expected, The Entire Ai Supply Chain May Face Re-Evaluation
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Geopolitics: The Taiwan Strait, The Middle East, And U.S.-China Relations Are All Black Swans That May Erupt At Any Time.
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Concentration Risk: The Weight Of The Seven Major Technology Giants In The Index Is Too High, And Problems With Any One Of Them Will Drag Down The Market.
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Inflation Swings: If Oil Prices Soar Again Due To The Situation In The Middle East And Inflationary Pressure Returns, The Fed May Turn Hawkish
Important Notes
U.S. stocks are near historical highs, and pursuing higher prices is risky. This article is only market analysis and does not constitute investment advice. Please assess your risk tolerance before investing.
6. How do Taiwanese invest in U.S. stocks?
Four methods, suitable for investors of different levels.
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Method 1 - Multiple Orders: Place Orders For U.S. Stocks Through Taiwanese Securities Firms (Cathay, Fubon, Yuanta). The Advantage Is That There Is No Need To Open An Account Overseas; The Disadvantage Is That The Handling Fee Is Relatively High (About 0.5-1%)
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Method 2 - Overseas Brokers: Firstrade, Charles Schwab, Ib, Etc., With Low Or Zero Handling Fees. The Disadvantage Is That You Need To Handle Overseas Remittances And Taxes Yourself
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Method 3 - U.S. Stock Etfs Listed On Taiwan Stocks: Such As Yuanta S&P 500 (00646) And Fubon Nasdaq (00662), Which Can Be Purchased With Taiwan Dollars. However, There Are Tracking Errors And Internal Deductions.
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Method 4 - Taiwan Stock Ai Supply Chain: Directly Buy Tsmc, Ase, Xinxing, Etc., And Indirectly Participate In The Us Stock Ai Market. Risks Are Affected By Taiwan Stock Market Sentiment
| Way | threshold | handling fee | Suitable |
|---|---|---|---|
| Re-delegation | Low (Taiwan account) | 0.5-1% | Lazy person, small amount |
| Overseas brokerage | Medium (remittance required) | 0-0.1% | Large and frequent transactions |
| Taiwan Stocks US Stocks ETF | lowest | Internal deduction 0.3-0.7% | Don't care at all |
| Taiwan stock supply chain | lowest | Taiwan stock handling fees | Bullish on Taiwan stock AI |
7. Key points to observe in the second half of the year
The following events will determine the trend of U.S. stocks in the second half of the year.
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Wwdc (6/8): Apple Ai Layout Revealed, Affecting The Entire Consumer Ai Community
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Nvidia Financial Report (Q2): The Report Card Of Ai Arms Dealers Will Determine Whether The Ai Market Will Continue
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Fed Fomc (June, September): Interest Rate Decisions And Economic Outlook
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Us Election (November): Policy Uncertainty May Exacerbate Market Volatility In Q3-Q4
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Ai Application Implementation: No Longer Just Looking At Ai Infrastructure, The Market Is Beginning To Pay Attention To How Much Actual Revenue Ai Can Bring
Key Takeaways
- 1 S&P 500 and Nasdaq both hit record closing highs on 5/26, with AI supply chain being the main driving force
- 2 The semiconductor sector led the gains, and the AI craze spread from NVIDIA to the depths of HBM, data centers, packaging and other supply chains
- 3 The easing of geopolitical conflicts in the Middle East + strong corporate financial reports + continued AI capital expenditures, triple positive support
- 4 Taiwanese investors can participate in the U.S. stock market through multiple entrustments, overseas brokerages or Taiwan stock ETFs
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