S&P 500 gained 6.2% in May, its strongest month since November 2023

The S&P 500 wrapped May with a massive 6.2% gain, the biggest monthly rise since November 2023, according to data from the final trading session of the month. 

The index closed at 5,911.69 on Friday, barely moving from the day before, but investors had already banked solid gains over the month despite rising tension over tariffs and a fresh shot at China from President Donald Trump.

Alongside the S&P 500’s performance, the Nasdaq Composite climbed 9.6% during the month, closing Friday at 19,113.77 after falling 0.32% that day. The Dow Jones Industrial Average rose 3.9% for May and ended at 42,270.07 on Friday, up 0.13%. 

The rally wasn’t driven by any one catalyst but gained momentum after news of a new trade agreement between the US and the UK surfaced. That deal raised hopes for more trade relief from other nations still stuck under tariff pressure.

Trump reignites China tensions during trading hours

While stocks had climbed throughout most of the week, Friday’s session turned shaky after Trump said in a post that China “violated” its current trade agreement with the United States. The statement rattled markets, briefly reversing gains before things stabilized.

Later that day, Bloomberg reported that the administration could roll out broader restrictions targeting China’s technology sector, fueling concerns that the US-China trade conflict might be far from over.

Adding to that, Treasury Secretary Bessent appeared on Fox News to confirm that talks with China had stalled. That left investors wondering whether a full agreement could ever materialize under the current White House strategy.

“It’s an awkward time,” said Jay Hatfield, chief executive officer of Infrastructure Capital Management. “If you’re an investor, you want to bet on good earnings, not good tweets about tariffs.”

The situation got messier midweek when the Court of International Trade temporarily blocked most of Trump’s existing tariffs, citing legal issues. But by Thursday afternoon, an appeals court issued a stay that kept the tariffs in place until at least the following week. 

Reports from The Wall Street Journal said the White House was weighing using the Trade Act of 1974 to impose new 15% tariffs for 150 days, bypassing Congress altogether.

Weekly figures showed a steady climb. The S&P 500 added 1.9%, the Dow rose 1.6%, and the Nasdaq gained 2% over the five-day stretch. The overall market rally came as investors seemed willing to stomach the uncertainty around trade, courts, and foreign policy — as long as the earnings stayed strong.

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