Daily Spotlight: May Usually OK

Argus

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May 01, 2025

Summary

The S&P 500 just delivered its third consecutive monthly decline in 2025 (-2.2% in April, before dividends). But if historical patterns hold true, the negative trend may end in May. The stock market typically rises in May, on average 1.0% and with a 71% winning percentage. We note that market returns in May have exceeded 5% on six occasions since 1980, including a 9.2% gain in 2000; and 2024 was not bad, at 3.9%. But there have been some clunkers in May, including 2019 (a painful 6.6% loss), 2010 (an 8.2% value wipeout), 2012 (down 6.0%) and 1984 (down 5.9%). May starts off as a busy month on Wall Street, as companies report first-quarter earnings, the nonfarm payrolls report is released, and the Federal Reserve holds a meeting. But once the retailers wrap up their results in the middle of the month, investors will be left to ponder trade-war prospects, inflation trends, future Federal Reserve activity, the risk of recession, and the long Memorial Day weekend. Looking ahead, our forecast for stocks in 2023 has been bullish, as we have expected the economy to grow (check), interest ra