S&P 500 saw best May since 1990: What to expect in June & beyond

00:00 Jared Blikre

The S&P 500 just clocked its best May in 35 years, but what happens next? I’m Jared Blikre, host of Stocks and Translation. Now, May was a market blockbuster, up just over 6%, the best showing since 1990, the second best since 1948. The historic post liberation day selloff, it felt like a bear market, but it set the stage for the huge rebound we saw. And guess what? Nevertheless, before you get too comfortable here, let’s see what history says about the next moves. In the chart behind me, we’re focusing on June alone. Historically, when May is this strong, June tends to keep the trend and momentum alive, at least modestly. The median return is a decent 0.6%, and that is double the long-term June average going all the way back to 1928, and much better than the tiny median move we’ve seen since 1990. Not a home run, but enough to suggest that a strong May is typically not a flash in the pan. Now, zooming out, month by month, here’s where it gets really interesting. July usually extends the party, posting a solid gain that is a full percentage point above normal, measured again since 1928 and 1990. But watch for a possible autumn shot. The historically volatile months of both September and October often deliver a reality check, with October specifically shaking out weak hands and below average returns. Here’s the good news though. November tends to be the real firework show, historically posting a big 3.8% median gain, over double its usual performance. Let’s bring it home now with the longer view. Through June, uh, from June through December, the S&P median return after these strong Mays is nearly 11%, and that is significantly higher than the longer term average since again, both 1928 and 1990. If we stretch that out, if we stretch out window through the following May, the gains climb above 15%, a substantial premium over typical years. So, what does this mean? Markets post pandemic, they seem to be speeding up, moving faster and faster, volatility hits harder, but patient is, patience is paying off. So yes, we have rates potentially above 5% on the 30 year, escalating tariff tensions, and both of these could create speed bumps. But remember, this rally is still unloved and underowned. That means even small doses of good news, better earnings, a friendlier Fed, cooling inflation, all of it could quickly reignite the spark. Bottom line, after a blockbuster May, history says, with a few caveats, stick around, it could get even better. And tune into Stocks and Translation for more jargon busting deep dives and new episodes on Tuesdays and Thursdays on Yahoo Finance’s website, or wherever you find your podcast.