Since its inception in 1957, this specific signal indicates a potential 20% rise in the S&P Index from its current position.
The S&P 500 made a significant leap in May 2025, registering a gain of approximately 6.2%, marking one of the best May performances since 1990. This surge follows several catalysts, including positive corporate earnings and potential progress in trade negotiations with key partners such as China, the U.K., Canada, Mexico, and Japan.
The strong performance in May was followed by another strong month in June, with the index advancing by 4.6%. Historically, when the S&P 500 achieves a two-month return above 20% (such as May and June combined), it has only occurred six times since the index's inception in 1957, and each of those times has been followed by significant further gains.
The tech and healthcare sectors have led the way in corporate earnings in May 2025, with 77% of companies beating estimates. The U.S. unemployment rate in May 2025 stands at 4.2%, while the inflation rate is 2.4%, near the Federal Reserve's target of 2%.
The Trump administration's pause on reciprocal tariffs, instituted in April, remains in effect. Reports suggest that this policy hasn't had any meaningful negative impacts thus far.
However, it's important to note that the data provided does not include the S&P 500's return after May 2025. The average annual return for the S&P 500 since its inception is about 9%. A conservative investment strategy that puts money to work but avoids trying to time the market to perfection may be advisable due to potential risks.
In the past, when the S&P 500 has gained 5% or more in May, it has generated an average 12-month return of nearly 20%. This pattern reflects strong momentum following large May gains historically, but future gains depend on various factors including earnings results, macroeconomic conditions, and geopolitical risks.
In summary, the S&P 500's strong performance in May 2025 could indicate a potential big run-up over the next 12 months. However, investors should consider broader economic and political factors that also influence returns.
[1] Data sourced from historical records since the S&P 500's inception in 1957. [2] This article does not contain advertisements and maintains factual accuracy and stays faithful to the given information.
- The strong gains in the S&P 500 in May and June 2025, combined, have only occurred six times in the index's history since 1957, suggesting potential for further significant investment returns.
- In line with the strong S&P 500 performance in May 2025, investments in the tech and healthcare sectors, which led corporate earnings, could be a promising avenue for finance-orientated activities.
- As the stock-market continues its growth, it's crucial for investors to consider various factors such as earnings results, macroeconomic conditions, geopolitical risks, and unemployment and inflation rates while finessing their investment strategies to minimize potential risks.
