Wall Street Sees Strongest May Since 1990
In a noteworthy May, Wall Street marked its highest performance since 1990, with the S&P 500 rising more than 6% since November 2023. This rally seems to have disregarded the usual “Sell in May” trend, possibly due to reduced trade promotions, solid corporate earnings, and a resurgence of investor confidence.
The SPDR S&P 500 ETF Trust, which acts as a proxy for the S&P 500 index, gained 6.3% over the past month. While many stocks in the ETF performed well, five stood out with gains exceeding 25% recently: NRG Energy Inc., Seagate Technology, Constellation Energy Corporation, Insulet Corporation, and Microchip Technology Inc..
Even amid geopolitical tensions and mixed economic signals, investor sentiment remained quite stable through May. Let’s explore the key factors that contributed to this market upswing.
A significant push in tech stocks was driven by optimism surrounding AI and general investor confidence.
After initial reactions to tariffs, there seems to be a sign of easing. Last month, the U.S. lowered tariffs on Chinese imports from 145% to 30%. In return, China reduced its retaliatory tariffs on U.S. goods from 125% to 10%. These adjustments are set to last for 90 days. Additionally, Trump deferred a planned 50% tariff hike on all EU products from June 1 to July 9.
Moreover, a ruling from the U.S. Court of International Trade halted some of Trump’s customs policies due to legal concerns. This temporary decision gave the stock market a brief boost, although the uncertainty around the administration’s tariffs lingers.
Recent economic data revealed cooler-than-expected inflation levels in April, while employment figures indicated that the labor market remains robust, adding 177,000 jobs. However, the unemployment rate held steady at 4.2%, raising questions about the overall economic strength.
It’s worth looking more closely at some stocks that fueled this market surge.
Insights into Key Stocks
The SPDR S&P 500 ETF Trust comprises 503 different holdings, each representing less than 7% of the portfolio, which helps mitigate concentration risk. The fund has diverse allocations across sectors, notably in information technology, finance, and consumer discretionary, each receiving double-digit investments.
With an asset under management of $603.5 billion, the ETF charges a modest annual fee of 9 basis points. It enjoys an average trading volume of around 68 million shares daily and sits at a Zacks ETF rank of #2, indicating a “buy” recommendation with a medium risk outlook.
NRG Energy is known for its involvement in the production and delivery of energy services. Over the past month, its stock saw a solid earnings estimate increase of 19 cents, with a projected growth rate of 10.54%. Notably, NRG Energy’s stock skyrocketed by about 36% recently, earning it a Zacks rank of #3.
Seagate Technology provides data storage solutions, primarily focusing on disk drives. Its stock received a positive earnings revision of 8 cents recently, leading to an increase of approximately 28% over the month, also ranking #3 by Zacks.
Constellation Energy offers electricity and natural gas services to around 2 million customers. Its stock surged 26.8%, despite a negative earnings estimate revision over the same period. The expected revenue growth rate for Constellation is around 9%, also placing it at Zacks rank #3.
Insulet, well-known for its insulin management systems, saw a stock price increase of 26.5% and a positive earnings revision of 3 cents recently, with an estimated growth rate of 33%, ranking #3 by Zacks.
Microchip Technology develops microcontrollers and other components for embedded systems. Its stock rose over 25% recently along with a solid earnings estimate revision of 19 cents for the fiscal year ending in March 2026, expecting to break even this fiscal year, also earning a Zacks rank of #3.
