Why the S&P 500 and Nasdaq Simply Had Their Finest Month Since 2023

Might was the very best month for the S&P 500 and Nasdaq Composite since November 2023, with the indexes rising 6.2% and 9.6%, respectively. 

Traders entered the month cautiously optimistic. Employment knowledge initially of the month recommended the financial system remained on stable footing. In the meantime, White Home officers have been signaling a need to ease tensions with China, whose imports on the time have been topic to a minimal 145% tariff. 

Shares surged mid-month when the U.S. and China agreed to slash their respective tariff charges for 90 days whereas officers negotiate a broader deal. Shares obtained extra boosts from President Trump’s dealmaking tour of the Center East and progress in Congress on Trump’s tax-cutting ‘One Massive, Stunning Invoice.’

The AI Commerce Returns

The AI commerce got here again into vogue in Might, because of stable massive tech earnings stories and the flurry of AI-focused offers popping out of Trump’s Center East journey. AI favorites Constellation Power Group (CEG) and Tremendous Micro Laptop (SMCI) have been the S&P 500’s second and third-best performing shares, rising 37% and 26%, respectively. 

Nvidia (NVDA) inventory gained 24% in Might. A lot of these positive factors got here on the U.S.-China commerce reprieve, however a robust quarterly earnings report close to the top of the month helped. 

Tesla (TSLA) inventory superior almost 23% as CEO Elon Musk distanced himself from the Trump administration and reassured Wall Road he’s dedicated to main the electrical automobile maker by a tumultuous time. Tesla is predicted to take a serious step towards refashioning itself as an AI firm when it launches its robotaxi service in Austin, Texas, in June.

Healthcare Faces Headwinds

Might was a troublesome month for the well being sector. Shares of UnitedHealth Group (UNH) misplaced a couple of quarter of their worth because the healthcare conglomerate withdrew its full-year steerage, introduced the departure of its CEO, and reportedly got here beneath Justice Division investigation for Medicare fraud. UnitedHealth was the worst-performing inventory within the S&P 500. It additionally weighed on the Dow Jones Industrial Common, which rose a comparatively modest 3.9% over the month, which wasn’t even its greatest month-to-month efficiency of 2025.

Eli Lilly (LLY) was the second-worst performer, falling about 18% through the month. Lilly is in a race with Denmark’s Novo Nordisk (NVO) to dominate the GLP-1 market, however the weight-loss medicine’ excessive costs have drawn scrutiny.

A Might 12 government order focusing on drug costs, whereas much less extreme than anticipated, was an extra headwind for pharmaceutical shares this month.