Stay informed with free updates
Simply sign up to the US equities myFT Digest — delivered directly to your inbox.
US stocks recorded their biggest monthly rally since late 2023 as investors were encouraged to pile back into risky assets as President Donald Trump backed away from some of his most severe tariffs.
The blue-chip S&P 500 rose 6.2 per cent in May, its best monthly performance since November 2023, while the tech-heavy Nasdaq Composite climbed 9.6 per cent. The rallies mean both indices are in positive territory this year after plunging in early April on tariff fears.
Members of the so-called Magnificent Seven tech stocks including Facebook parent Meta, Elon Musk’s Tesla and chipmaker Nvidia — which on Wednesday reported an almost 70 per cent surge in quarterly revenue — led the charge. Indices tracking financials and industrials climbed close to record highs.
“The month of May was a good one for stocks,” said Mike Zigmont, co-head of trading and research at Visdom Investment Group. “Sentiment is very optimistic and unafraid.”
Stocks initially started rising on April 9, when the US president announced a 90-day pause to the sweeping tariffs he had unleashed on most of the country’s big trading partners a week earlier in his “liberation day” announcement.
Equities were given a further boost in early May when the US and UK announced a trade deal. A move by the US and China to cut tariffs for at least 90 days helped fuel further rises in Wall Street equities even as US Treasuries and the dollar remained under pressure.
The biggest cryptocurrencies have surged at the same time, underscoring investors’ growing appetite for risk, with the price of bitcoin rising as high as $111,965 on hopes that the White House is on the cusp of agreeing its first regulations for digital assets.
Many of Wall Street’s biggest investors missed out on the stock rally, however, having trimmed their positions on US assets on fears of an impending economic slowdown and broader concerns about volatile policymaking in Washington.
Some warn that Trump’s unpredictable policies mean the market’s recent gains could soon evaporate. On Wednesday a US court ruled that the president’s “liberation day” tariff scheme was illegal, though the ruling was temporarily paused by an appeals court a day later.
Analysts expect the president to impose fresh levies on chips and pharmaceutical goods over the coming weeks.
“[Trump] has tremendous authority to act, and we suspect he will want to remind everyone that one court ruling will not impede his agenda,” said Mike O’Rourke at Jones Trading. “It is in the president’s nature to continually remind people of the power he holds.”
