One of the potential advantages of working with Finley Davis Private Wealth is having a team that continually evaluates the forces shaping the investment landscape and how they may impact your broader financial picture. Markets are constantly evolving, and thoughtful planning requires more than simply reacting to headlines.
The latest CIO Chartbook from RiskBridge Advisors provides a valuable look at the trends driving today’s economy and markets. While uncertainty remains, the report highlights several reasons for cautious optimism, particularly around economic growth, technological innovation, and corporate earnings. At the same time, it identifies areas where investors may need to think differently about risk management and diversification.
Below are some of the key takeaways from the May 2026 Chartbook.
HIGHLIGHTS
1. Artificial Intelligence Continues to Drive Growth
RiskBridge believes we remain in the early stages of a significant AI-driven transformation.
Key observations:
• AI infrastructure spending continues to accelerate
• AI-related capital investment is expected to contribute meaningfully to U.S. economic growth this year
• Earnings growth is expanding beyond technology companies as other sectors may begin to benefit from AI adoption
While concerns about an AI bubble have increased, RiskBridge believes the current business cycle could continue through year-end. As a result, they have raised their year-end target range for the S&P 500 Index.
2. Economic Conditions Remain Supportive
The RiskBridge Business Cycle Index continues to signal economic expansion.
What stands out:
• U.S. GDP growth expectations remain positive
• Employment levels remain strong
• Liquidity conditions remain supportive of financial markets
While some consumer fundamentals have softened, the overall backdrop remains consistent with continued economic growth rather than recession.
3. Inflation Is Moving Higher Again
Inflation has become one of the most important themes for investors in 2026.
Highlights:
• Headline CPI increased to 3.8%
• Producer prices accelerated to 6.0%
• Energy-related supply shocks are contributing to higher inflation expectations
RiskBridge believes inflation may remain elevated into early 2027, creating challenges for both policymakers and investors.
4. The Outlook Has Improved
One notable change in this month’s report is a higher probability assigned to stronger-than-expected economic growth.
RiskBridge’s current outlook assigns:
• 50% probability to a base-case environment of moderate growth and elevated inflation
• 35% probability to an upside scenario featuring above-trend growth and stronger earnings
• 15% probability to a downside outcome driven by prolonged supply disruptions and inflation pressures
The increase in the upside scenario reflects continued strength from fiscal spending, AI investment, and resilient economic activity.
5. Traditional Diversification May Not Work the Same Way
One of the more important observations in the report is that bonds are providing less diversification benefit than investors have historically expected.
Key considerations:
• Stock and bond correlations remain unusually high
• Rising inflation can pressure both stocks and bonds simultaneously
• Diversifiers such as real assets, infrastructure, commodities,
TIPS, and alternative strategies may play a larger role in portfolio construction going forward
The Bottom Line
The message from this month’s Chartbook is not one of caution alone. Rather, it reflects an environment where growth opportunities remain present, but portfolio construction and risk management require greater attention than in years past.
Economic growth remains positive. Corporate earnings remain strong. Innovation continues to create opportunity.
At the same time, rising inflation, higher interest rates, and changing market relationships are creating new challenges that require thoughtful oversight and ongoing evaluation.
Why This Matters for You
Periods like these reinforce the value of having a coordinated wealth strategy that looks beyond any single investment or market headline.
At Finley Davis Private Wealth, we continuously monitor changing market conditions, evaluate opportunities and risks across your financial life, and work to help ensure your strategy remains aligned with your long-term goals.
Markets will evolve. Your life will evolve. Our role is to help your financial strategy evolve alongside them.
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Source: RiskBridge CIO Chartbook, May 2026. Data as of June 1, 2026, unless otherwise noted. Information, analysis, forecasts, and market observations are derived from RiskBridge Advisors, Bloomberg, FactSet, Bureau of Labor Statistics, Federal Reserve, MSCI, Yardeni Research, and other third-party economic and market data providers, as well as RiskBridge proprietary research and models. Original charts, forecasts, scenario analysis, and supporting references are contained within the Chartbook. Please refer to the full report for complete source information, disclosures, and methodology. Past performance does not guarantee future results. All investments involve risk, including possible loss of principal. Any forward-looking statements, projections, estimates, expectations, or opinions are subject to change without notice and may not develop as anticipated. This material is provided for informational purposes only and should not be construed as investment, tax, legal, or accounting advice.