Hi All — Brian here. It’s summer. Well, not really. Summer doesn’t officially start until June 20th, but Memorial Day Weekend has come and gone, the kids are largely out of school or wrapping up classes soon, and pools across the country are open for business.

In last month’s newsletter, we wrote about April showers and a hope for May flowers. With May in the rearview, it’s safe to say that those flowers did in fact bloom. The market rebound was fueled not just by improving geopolitical headlines, but by renewed optimism in the tech sector.

While tariff talk dominated the narrative earlier this year, strong earnings, particularly from AI leaders like NVIDIA, reminded investors of the power of innovation amid uncertainty. We’re going to examine that and more this month, including taking a closer look at labor market dynamics, inflation trends, and what conflicting consumer sentiment data might be signaling.

Beyond the markets, we highlight key updates that could impact your financial plan, including a major change to Social Security benefits and a strategic look at 529 plans for intergenerational wealth transfer. Let’s dig into the details and make sense of what’s moving the markets, and what it means for your long-term goals.

As always, we’re here to help so please don’t hesitate to reach out via email or by hitting the button below to schedule a time to speak. For now, let’s dive in to what drove the markets in May.

MAY MARKET PERFORMANCE

MAY MARKET SUMMARY

• Last month, U.S. stocks posted strong gains across the board. The Dow rose 3.94%, the S&P 500 jumped 6.15%, and the Nasdaq Composite outperformed, surging 9.56%.

• One key driver behind the rally was a de-escalation in U.S.-China tariff tensions. In fact, the somewhat calmer tone helped fuel the best monthly performance for the S&P 500 and Nasdaq since November 2023. Another driver was optimism around the tech sector. More on that below.

• Rising initial and continuing jobless claims hint at some weakening in the labor market.

• Manufacturing also showed some signs of weakness last month with the ISM Manufacturing Index falling below 50. The Services PMI indicated slight contraction as well, coming in at 49.9 percent, the first time it’s contracted since June 2024.

• Consumer sentiment was also tricky to pin down in May. On one hand the Conference Board Consumer Confidence index saw a significant increase, reflecting improved consumer sentiment. On the other, the University of Michigan Sentiment index remained flat, potentially indicating some consumer concerns.

• Lastly, CPI, or the consumer price index, increased 0.1% in May, putting the annual inflation rate at 2.4%.

ONE BIG THING: LET’S TALK ABOUT TECH

Over the past few months, we’ve focused on tariffs for this section of our monthly newsletter. And rightfully so, as they’ve largely been driving market sentiment. There’s a good argument to be made that we should be talking about them again this month. Because, as we noted above, a perceived de-escalation between the U.S. and China buoyed sentiment on The Street, sending major averages higher. But three months in a row of tariff talk can make this section feel slightly stale, so we want to shine a light on another catalyst that helped markets recover in May: the tech sector.

Alongside geopolitical developments and economic indicators (like jobs data, inflation, and consumer sentiment), the investment community constantly monitors corporate earnings growth. And to that end the 500 companies in the S&P 500 index posted largely good results during the first three months of this year. This is especially true for the major technology names. And to illustrate that point even further, Wall Street was pleased with NVIDIA’s recent results as the company serves as a bellwether for the space.

The tech company said it’s still seeing strong demand for its chips, which are helping drive the boom in artificial intelligence. More importantly this robust demand comes in spite of the trade restrictions its facing from China. Mega-cap names like Amazon, Meta, Google, and Microsoft are still investing heavily into the space, reiterating their combined capital expenditure forecasts of over $320 billion this year.

This is driving revenue higher for NVIDIA’s data center division. More broadly, it’s sending a message to Wall Street that investment in the space is not slowing. This is noteworthy, especially set against such a choppy political background that we’re sure will continue to insert volatility into the markets moving forward. Outside of tech-spend our team is continuing to monitor corporate earnings in the face of geopolitical headwinds as we head towards the second half of the year.

FEATURED POST

The Impact of the Social Security Fairness Act

The Social Security Fairness Act was signed into law by former President Joe Biden in January. But most impacted recipients didn’t begin to see the benefits until April 2025. Here’s everything to know about this substantial change to Social Security.

Click here to keep reading →

KEEP READING

CLOSING REMARKS

Our team at Griffin Asset Management is here to help you make the most of the opportunities and challenges ahead.

If you have any questions or would like to discuss your financial strategy, please don’t hesitate to reach out.

We’re always available to set up a call and provide the personalized advice you need. Thank you for your continued trust and partnership.