Oil, inflation, bitcoin, AI, central banks: why May 2026 could mark a market turning point much deeper than it appears.
For months, markets moved forward with a dominant conviction: disinflation would eventually allow central banks to lower rates, AI would continue to support US equities, and geopolitical tensions would remain contained.
May 2026 has abruptly weakened this scenario.
In just a few sessions, investors have had to simultaneously re-incorporate:
Return of inflationary risk
Tensions around Iran
Rate hikes
Rising cost of capital
The result is visible everywhere: oil is once again becoming the central market variable, gold is no longer reacting as it used to, crypto-assets remain under monetary pressure, and even AI stocks are beginning to be treated differently.
The most important thing is not the movement of any particular asset class.
The most important thing is that markets are starting to change their reading of the world.
The brutal return of oil to the global equation
This is probably the major fact of the month. For nearly a year, oil had gradually ceased to be the main macro-financial driver. Markets were focused primarily on AI, US growth, big tech earnings, and future rate cuts.
May has changed this hierarchy. Tensions surrounding Iran and the Strait of Hormuz have placed energy back at the center of global markets. Both the United States and China have had to intervene publicly on the subject of maritime traffic in the area, through which about one-fifth of the world’s oil transits. (reuters.com)
What markets are beginning to fear is not just more expensive oil. They are beginning to fear the return of a much broader cycle:
oil → inflation → central banks → high rates → economic slowdown
And this shift is considerable.
American inflation figures have awakened the market
The second shock of the month came from the United States. US April CPI inflation came in at 3.8% year-on-year, a level higher than market expectations. (reuters.com)
The most important detail lies elsewhere: the increase is largely driven by energy. In other words, the market is beginning to re-incorporate a scenario it thought was gradually being discarded: that of inflation that could remain durably higher, even with already restrictive rates.
The reaction was immediate: a rise in the dollar, tension on US rates, and a decline in assets most sensitive to the cost of capital. UBS has pushed back its expectations for Fed rate cuts to late 2026. (reuters.com)
And this point deeply changes market psychology: for months, investors were buying into the idea of a more accommodative future. Today, they are starting to envision a world where high rates last much longer.
Why gold is no longer fully playing its safe-haven role
This is probably the most interesting movement of the month. Historically, geopolitical tensions benefit gold. But despite renewed tensions in the Middle East, the yellow metal fell to around $4,686/oz on May 13. (reuters.com)
Why? Because today, the market is looking more at real rates, the dollar, and future monetary policy than at geopolitical risk itself. When investors anticipate higher rates for longer, the opportunity cost of non-yielding assets mechanically increases.
In other words: markets currently consider the inflationary risk related to energy to be stronger than the classic safe-haven effect of gold.
Bitcoin and crypto: still ultra-dependent on global liquidity
Bitcoin continues to be treated as an asset deeply linked to global liquidity. As of May 13: BTC is trading around $79,300, and Ethereum around $2,250.
For several weeks, crypto-assets have reacted almost mechanically to variations in US real rates, the dollar, and monetary policy expectations. As long as markets hoped for rapid rate cuts, crypto-assets benefited from a favorable environment.
The return of inflation puts this scenario back under pressure. Coinbase also reported its second consecutive quarterly loss in a context of slowing trading volumes. (reuters.com) The subject is therefore no longer just technological. The subject is becoming monetary again.
Even AI is starting to be re-priced differently
The AI theme remains central. But the market is becoming much more demanding. For months, the narrative alone was almost enough to support the valuations of major tech stocks. Today, investors are looking more at:
- the cost of infrastructure,
- semiconductor-related spending,
- energy consumption,
- and above all, the actual profitability of these massive investments.
In parallel, the rise in real rates mechanically changes the valuation of long-duration growth assets. In practice: AI remains dominant, but the market is starting to distinguish the real winners from those simply benefiting from the narrative. And this transition could become one of the major themes of the second half of 2026.
What the markets are actually re-pricing
The central point of this month of May probably lies here. Markets are not simply re-pricing a rise in oil, higher inflation, or geopolitical tensions.
They are starting to re-price a world that is potentially more inflationary, more geopolitically fragmented, more costly in capital, and less supported by central banks. When this hypothesis changes, all asset classes must be reassessed: equities, crypto, gold, bonds, credit, dollar. This is exactly what has been starting to happen over the last few sessions.
