US Markets
Stocks rose in May as investors cheered upbeat Q1 corporate reports and signs that the economy was still strong while not overheating.
The Dow Jones Industrial Average gained 2.30 percent, while the S&P 500 Index added 4.80 percent. The tech-heavy Nasdaq composite picked up 6.88 percent.1
Q1 Corporate Reports
May wrapped up the Q1 company report season. The S&P 500 is on track to post a 5.9 percent growth rate for the quarter, which will be the highest year-over-year earnings growth rate since Q1 2022.2
Mid-month, mega-cap tech names rallied in anticipation of the Q1 corporate report from Nvidia, which makes semiconductors for artificial intelligence and is one of the largest stocks in the S&P 500 by market capitalization. Nvidia’s upbeat report helped lift the Nasdaq to a fresh record.3
Nvidia’s corporate report should not be considered a solicitation for the purchase or sale of the company’s stock.
Investors See Goldilocks
Gains over the month were also driven by a delicate balance of “Goldilocks” economic data that were not too cold and not too hot. For example, 175,000 jobs were created, which was a solid number but less than the 240,000 jobs that economists had expected.4
In addition, a cooler-than-expected Consumer Price Index (CPI) report released mid-month sparked a broad-based rally as the news raised investors’ hopes that the Fed might adjust interest rates at some point this year. The news helped push the Dow above 40,000 for the first time.5
What Investors May Be Talking About in June
In the month ahead, attention is expected to shift to Apple for its annual Worldwide Developers Conference, scheduled for June 10 through 14.7
Apple is expected to release its latest iPhone software and preview what is coming for the second half of the year. Apple will tease new features of upcoming software releases, and investors are expecting to gain insight into Apple’s artificial intelligence strategy.7
Apple’s corporate event should not be considered a solicitation for the purchase or sale of the company’s stock.
While AI mentions from S&P 500 companies have steadily increased, Apple has not provided many updates on its AI strategy. Some anticipate that Apple will give more details about its approach at the conference.8
World Markets
The MSCI–EAFE Index gained 3.29 percent in May as markets rallied globally.9
European stocks performed well, with Germany picking up 3.16 percent and the United Kingdom tacking on 1.61 percent. Spain led, gaining 4.31 percent, while France was flat (+0.10 percent).10
Pacific Rim markets were mixed. Australia rose 0.49 percent, and China’s Hang Seng Index rose 1.78 percent. However, Korea was down 2.06 percent, and Japan’s Nikkei was flat (+0.21 percent).11
The Fed
Minutes from the April/May Federal Open Market Committee meeting, released on May 22, stated that some Fed officials worried about the lack of progress on inflation. At that meeting, the Federal Open Market Committee (FOMC) kept the Fed funds rate steady at the 5.25–5.50 percent target range.21
The next two-day FOMC meeting concludes on June 12.
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1. WSJ.com, May 31, 2024
2. Advantage.FactSet.com, May 31, 2024
3. WSJ.com, May 22, 2024
4. WSJ.com, May 3, 2024
5. WSJ.com, May 15, 2024
6. SectorSPDRS.com, May 31, 2024
7. CNet.com, May 30, 2024
8. Forbes.com, May 27, 2024
9. MSCI.com, May 31, 2024
10. MSCI.com, May 31, 2024
11. MSCI.com, May 31, 2024
12. CNBC.com, May 29, 2024
13. WSJ.com, May 3, 2024
14. APNews, May 15, 2024
15. IndustryWeek.com, May 16, 2024
16. Marketwatch.com, May 16, 2024
17. National Association of Realtors, May 24, 2024
18. Marketwatch.com, May 23, 2024
19. WSJ.com, May 15, 2024
20. BankingJournal.aba.com, May 24, 2024
21. WSJ.com, May 21, 2024
22. Wikipedia.com, 2024
23. DetroitNews.com, May 8, 2024
24. NOAA.gov, 2024
25. BusinessInsider, April 22, 2020. Updated 2024.
26. Journiest.com, June 24, 2022
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