U.S. stocks have recorded their biggest monthly rally since late 2023 as investors are encouraged to return to risky assets as President Donald Trump pulls out of his worst tariffs.
The Blue Chip S&P 500 S&P 500 rose 6.2% in May, and has performed best monthly since November 2023, while the technology-heavy Nasdaq Comprehensive climbed 9.6%. The rally means the two indexes fell in early April on positive territory this year after tariff concerns.
Members of the so-called grand seven tech stocks include Facebook Parent Meta, Elon Musk's Tesla and Chipmaker Nvidia (reported Wednesday, nearly 70% of quarterly revenue) led the charge. Indexes that track finance and industry climbed near record highs.
"May is a great stock," said Mike Zigmont, co-head of trading and research at Vivdom Investment Group. "The emotions are very optimistic and scary."
Stocks initially began to rise on April 9, when the U.S. president announced a full-scale tariff he released in most of the country's large trading partners a week before the Liberation Day announcement.
Stocks rose further in early May when the U.S. and Britain announced a trade deal. The U.S. and China’s actions to cut tariffs for at least 90 days will help cheer for further gains in Wall Street stocks, even as U.S. Treasury bonds and the dollar remain under pressure.
The largest cryptocurrency surged simultaneously, highlighting the growing demand for risk from investors, with Bitcoin rising as high as $111,965, hoping the White House would agree to its first regulations on digital assets.
Many of Wall Street's biggest investors missed the stock rally, but their positions on U.S. assets were revised due to concerns about an upcoming economic slowdown and greater concerns about Washington's volatile decisions.
Some have warned that Trump's unpredictable policies mean that market earnings will soon evaporate recently. On Wednesday, a U.S. court ruled that the president's "Erection Day" tariff plan was illegal, although the ruling was temporarily suspended in the Court of Appeal on a daily basis.
Analysts expect the president to charge fresh levies on chip and pharmaceutical goods in the next few weeks.
“(Trump) has a huge power of action and we suspect he will want to remind everyone that the court rulings will not hinder his agenda,” said Mike O'Rourke of Jones Trade. “Constantly reminding people that the power he has is in the essence of the president.”