US President Donald Trump has announced the extension of US-Iran ceasefire which should ultimately result in the re-opening of the Strait of Hormuz. The Strait has been the centre of negotiations following Iran effectively closing the trade route which resulted in the price of oil to sharply rise.
The announcement that a deal has been agreed provided some relief in the oil market, with the expected increase in supply helping to lower prices. That said, it will take time for the transit of oil to reach pre-war levels.
Home pressure
The deal might have come a little too late, as the damage to Trump’s reputation following the conflict with Iran may have already been done. A recent poll suggested 65% of voters disagreed with his handling of the war and just 37% of people approve of his performance as president.
A major concern for voters is the increased oil price due to the conflict, although oil has now fallen, US consumers have had close to four months of elevated prices. This hasn’t just affected prices at the pump, but caused higher prices all round as business deal with the added cost.
This has resulted in inflation spiking up. In February just before the conflict inflation stood at 2.4%, in May it reached 4.2%. As US consumers deal with the higher costs there was pressure on Trump from voters to make a deal to help lower oil prices and rein in costs.
Interest rates
Going into the year, many were expecting the Federal Reserve (Fed) to cut interest rates twice in 2026. This was reinforced as Kevin Warsh became the new chairman, with many anticipating that he would bow to Trump’s wishes and lower rates.
However, with the inflation fallout from the conflict, many economists have pivoted their views towards a potential rate hike. Even with the most recent deal, economists believe prices could stay elevated.
How have US stock markets performed?
The US stock market grew 29.84% over the last 12 months to the end of May 2026*, with smaller companies outperforming larger peers, returning 38.69%.
We are well embedded into President Donald Trump’s second term, and the stock market has continued to be volatile.
We had “Liberation Day” just over a year ago, when he announced sweeping tariffs on some of the US’ closest trading partners, causing markets to tumble. The tariffs were then paused to allow trade agreements to be made, which gave the market some relief as it started to rebound.
Towards the end of 2025, there was a significant volatility as investors scrutinised artificial intelligence (AI) companies – some of the largest companies in the world.
Money has poured into the so-called winners of AI, which has seen some share prices reaching all-time highs. But more recently, investors have become concerned that AI could make some other companies less relevant. Software companies have been hit particularly hard, as many believe AI could easily replace the software many use and create.
Most recently, we have seen conflict with Iran in the Middle East. This resulted in the Strait of Hormuz being closed, causing oil prices to skyrocket.
Markets fell off the back of this, as concerns moved to the impact of higher oil prices on inflation and the delay it could have on expected interest rate cuts. But markets rebounded strongly following confirmation of the ceasefire in April and now a potential peace deal has prolonged the rally.
From a sector point of view technology was the best performing, returning 56.10%, while energy also performed well returning 42.57%. Whereas financials was the worst performing sector, returning 2.92%.
31/05/2021 To 31/05/2022 | 31/05/2022 To 31/05/2023 | 31/05/2023 To 31/05/2024 | 31/05/2024 To 31/05/2025 | 31/05/2025 To 31/05/2026 | |
|---|---|---|---|---|---|
MSCI North America Small Cap | 0.31% | -2.16% | 17.97% | -1.76% | 38.69% |
S&P 500 Energy | 98.54% | -5.79% | 21.84% | -14.63% | 42.57% |
S&P 500 Financials | 7.26% | -7.01% | 30.15% | 17.39% | 2.92% |
S&P 500 Information Technology | 14.99% | 21.34% | 34.56% | 8.22% | 56.10% |
S&P 500 | 12.45% | 4.66% | 24.78% | 7.18% | 29.84% |
How have our Wealth Shortlist funds performed?
US funds on the Wealth Shortlist delivered positive performance over the past year, with some doing better than others.
A year is a short time to assess the skills of a fund manager though. Managers with different strengths, styles and areas of focus will perform differently over time.
Investing in these funds isn’t right for everyone. Investors should only invest if the fund’s objectives are aligned with their own, and there’s a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest and make sure any new investment forms part of a diversified portfolio.
This article isn’t advice. Investments and any income they produce will rise and fall in value, meaning you could get back less than you invest. If you’re not sure if an investment is right for you, ask for financial advice. Remember, past performance is not a guide to the future.
For more detail on each fund, it's charges and specific risks, please see the links to their factsheets and key investor information.
The strongest performing US fund on the wealth shortlist over the last year was Artemis US Smaller Companies. The fund rose 49.38%* outperforming the IA North American Smaller Companies sector average which returned 33.77%.
Our analysis shows that managers Cormac Weldon and Olivia Micklem’s stock selection was the main driver of the fund’s impressive returns over the year.
Typically, we expect the fund to hold up better when markets are falling given its quality bias, but it has also outperformed when markets were rising. Stock selection in the technology sector has been big contributors to the fund’s strong returns.
The fund may also invest in a small number of companies which can increase risk, as each has a larger impact on performance. They also invest in smaller companies which also adds risk.
The weakest performer was BNY Mellon US Equity Income, rising 26.44%, still ahead of the IA North America sector average 23.69%. Our analysis suggests the managers stock selection was the main driver of the funds returns over the year particularly in the financial and technology sectors.
The fund can be quite concentrated, so each investment can have a big impact on performance, increasing risk. There is also the flexibility to use derivatives which increases risk. Charges are also taken from capital which could boost income but reduces the potential for capital growth.
While we believe Wealth Shortlist funds have long-term performance potential, they won’t perform the same way at the same time. We think it’s important for investors to build a portfolio filled with managers who have different approaches and investing styles to help generate long-term returns.
Annual Percentage Growth
31/05/2021 To 31/05/2022 | 31/05/2022 To 31/05/2023 | 31/05/2023 To 31/05/2024 | 31/05/2024 To 31/05/2025 | 31/05/2025 To 31/05/2026 | |
|---|---|---|---|---|---|
Artemis US Smaller Companies I | -11.11% | -7.53% | 28.73% | -4.93% | 49.38% |
IA North American Smaller Companies | -7.04% | -1.29% | 15.86% | -5.60% | 33.90% |
BNY Mellon US Equity Income | 26.69% | -2.19% | 17.40% | 5.31% | 26.84% |
S&P 500 | 12.45% | 4.66% | 24.78% | 7.18% | 29.84% |
IA North America | 6.36% | 2.62% | 21.69% | 5.35% | 23.71% |
The S&P500 is a product of S&P Dow Jones Indices LLC and has been licensed for use by Hargreaves Lansdown Asset Management