Stocks Extend Highs; Paxton Defeats Cornyn in Texas Senate Runoff | Bloomberg Brief 5/27/2026
Speakers
Ella Gude
— Head of Fixed Income and CO-Head of Real Return, BNY Investments Newton
Chloe Meley
— Bloomberg Reporter
Summary
US stocks hit record highs driven by AI momentum, with SK Hynix and Micron joining the trillion-dollar market cap club. Oil prices dip on optimism for a US-Iran deal to reopen the Strait of Hormuz. In Texas, Ken Paxton defeats incumbent John Cornyn in the GOP Senate runoff. Fixed-income strategist Ella Gude warns of higher inflation risks and maintains a structural short on the US dollar and cautious bond stance.
- AI chipmakers continue to push equities to new records; SK Hynix market cap exceeds $1 trillion.
- Oil prices fall below $90 on hopes of a US-Iran agreement to fully reopen the Strait of Hormuz.
- Ken Paxton wins GOP Senate runoff in Texas after Trump endorsement.
- Ella Gude of BNY Investments discusses inflation as a key risk, sees higher yields ahead, and is structurally short the US dollar.
- Bond yields remain elevated; Fed expected to hold rates, not cut.
- European car sales rise for third month, driven by electric and hybrid vehicles.
- China-linked Volvo receives exemption from proposed US ban on connected cars.
- Retail earnings season continues with Dick's Sporting Goods and Abercrombie & Fitch reporting this week.
Trade Ideas
SK Hynix still cheap, more upside.
SK Hynix valuations remain very cheap despite a 1000% rise in the past 12 months, signaling further upside as the memory chip demand surge sustains.
Long-term bond yields to rise.
Yields are trending higher across G7 bond markets due to rising inflation and reduced central bank buying, and the trend remains in play, making higher yields (lower bond prices) likely ahead.
Structural short on U.S. dollar.
The Fed cannot significantly hike in the face of higher inflation, the dollar remains expensive versus major currencies, and U.S. fiscal dynamics are concerning, so a structural short on the U.S. dollar is warranted.
