Market Rebounds as Inflation Pressures Remain Elevated – GPS Wealth Monthly Market Update

Markets rebounded in May 2026 as investors grew more optimistic that Middle East tensions would not escalate further, with international shares gaining 4.53% and emerging markets surging nearly 10%, while oil prices fell on hopes of a US-Iran agreement. However, inflation pressures remained elevated with the RBA hiking rates 0.25% to 4.35% and US inflation climbing to 4.2%, prompting central banks to stay cautious as the combination of resilient equities, persistent inflation, and ongoing geopolitical risk suggests continued volatility through the remainder of 2026.