The unofficial start to summer is here. There’s just one week left to go this month. And, with the stock market closed Monday for the Memorial Day holiday, investors are heading into the holiday weekend in good spirits. In May, the S & P 500 reached fresh all-time highs, above 7,500, after staging a major recovery from the March lows. On Friday, it was still just below that record. It wouldn’t be a surprise if stocks soon took a breather, though. With first-quarter earnings wrapping up, and the calendar quickly emptying of any major catalysts, it may be time for a technically-driven market to allow fundamentals to catch up to prices. “You need a little bit of a pause, and a period of consolidation,” said Mark Hackett, chief market strategist at Nationwide’s Investment Management Group. “Because what you don’t want is to get ahead of yourself to the point where you’re losing reality.” Exceptional in face of risk The stock market has proven itself exceptional in the face of mounting risks. The continued war in Iran has hurt global supply chains to the point that experts are now saying gas prices won’t return to their pre-war levels anytime soon , likely worsening conditions for lower-income consumers. Yields on longer-dated Treasurys have risen to levels not seen since before the financial crisis. And, the next move from the Federal Reserve is now expected to be an interest rate hike, not a cut, as central banks around the world try and cap rising inflation. But the stock market rally is showing signs of strain. Even professional investors have drawn down cash holdings to buy stocks , with average cash levels dropping to 3.9% of portfolios, from 4.3%, according to a widely-followed survey of fund managers from Bank of America Securities. A drop below 4.0% is considered a sell signal. It seems to be a bullish signal, on its face. But investors drawing down cash to chase the rally also means they could soon run out of capital to put toward semiconductors, for example, or quantum stocks. It also makes it unlikely the stock market will run up 19% in the next seven weeks as it did in the last seven. “I expect that a lot of the kind of easy money — that 20% rally — that’s probably behind us,” Nationwide’s Hackett said. There are some economic data and earnings reports next week that could move markets. The personal consumption expenditures price index that’s set to release Thursday, for example, is expected to show inflation moving farther away from the central bank’s 2% target. Core PCE, which excludes food and energy, is forecasted to have risen 3.4% in April, up from 3.2% in March, on a year over year basis. A smattering of earnings from some key tech companies such as Salesforce (a part of the Dow Jones Industrial Average), or Dell Technologies have the potential to move markets next week, as could any sour commentary on the consumer out of Costco Wholesale or Dollar Tree . The near-term seasonal outlook is also choppy . The Stock Trader’s Almanac shows that June is the worst month for the major averages in midterm election years. The S & P 500 has lost 2.1% on average during the month. Beyond that, however, the fundamental backdrop remains strong for stocks. This past earnings season has proven that companies are starting to see strong returns on their AI investment. The consumer, for now, remains resilient, with the effects of tax cuts from last year’s One Big Beautiful Bill Act helping to offset higher energy prices. So, for now, traders can leave their trading desks for a pleasant, long holiday weekend. Week ahead calendar All times ET. Monday, May 25 NYSE closed for Memorial Day. Tuesday, May 26 9:00 a.m. FHFA Home Price Index (March) 10:00 a.m. Consumer Confidence (May) Earnings: AutoZone Wednesday, May 27 8:15 a.m. ADP Weekly Employment change (05/09) Earnings: HP , Salesforce , Synopsys , Agilent Technologies Thursday, May 28 8:30 a.m. Durable Orders preliminary (April) 8:30 a.m. GDP Chain Price second preliminary (Q1) 8:30 a.m. GDP second preliminary (Q1) 8:30 a.m. Initial Claims (05/23) 8:30 a.m. Core PCE Deflator (April) 8:30 a.m. Personal Consumption Expenditure (April) 8:30 a.m. Personal Income (April) 10:00 a.m. New Home Sales (April) Earnings: Costco Wholesale , Dell Technologies , NetApp , Autodesk , Hormel Foods , Dollar Tree Friday, May 29 8:30 a.m. Wholesale Inventories preliminary (April) 9:45 a.m. Chicago PMI (May)