Best Month Since November 2023

May 30, 2025

We mentioned in last month’s letter that May has historically been an underperformer when it comes to stocks.  However, we suggested this year the tariff tantrums were going to drive the market and that is exactly what happened. It seemed like the market would spike or swoon from one week to the next depending on what Trump was saying about tariffs.  Twice during the month, the market plunged on threats of high tariffs, only to rebound when he paused the proposed increases within days.  Those who have watched Trump negotiate over the years know he likes to come in hard and then ease off.   In this case, if you are threatened with a 50% or 100% tariff and end up paying 10% you think you got a deal.  Never mind your tariff was zero before he started. We know a sustainable import tariff of 10% would add about $250B a year to U S revenue. At the end of the month investors did not “sell in May and go away” as the S&P 500 had its best month in 2025 gaining 6.1% and is now up .5% for the year. Oil bounced back 4.4% while gold hit another all-time high before closing 3% lower.  The interest rate on the benchmark 10 year Treasury was nearly 6% higher on the month.

The month began on a Thursday with strong corporate earnings reports followed by a strong monthly jobs report.  At the end of the first 2 days the S&P was up 2.1% and on its first 9 days winning streak in 21 years!  The first full week was all about tariffs, with threats of new tariffs, news of meetings to discuss tariffs and the first actual tariff agreement.  At the end of a volatile week the S&P had lost .5%. Over the following weekend the U S and China met in Switzerland to talk trade, and we began the second full week with news both parties had agreed to pause their sky-high tariffs while they work on an agreement and the S&P 500 jumped over 3%.  The widely followed index moved higher every day this week and back into positive territory for the year.  The S&P 500 ended the week with a gain of over 5%. The following week began with a Moody’s downgrade of U S debt for the first time since 1917, but since they were the 3^rd of the 3 rating agencies to make this move investors greeted it with a yawn.  Mid-week Trump’s “One Big Beautiful Bill” narrowly passed the House sending interest rates higher and the market lower.  On Friday Trump decided he would threaten 50% tariffs on the EU and the S&P 500 ended the week with a loss of 2.6%.  The final week of the month began with the Memorial Day holiday and news Trump had decided to delay the 50% tariff on the EU until July 9^th which sent the S&P 500 up 2%.  Wednesday the U.S. Court of International Trade ruled Trump overstepped his authority when he imposed his “reciprocal” tariffs adding more confusion and forcing Trump to use other tools he has at his disposal. At the end of the holiday shortened week the S&P 500 was gained 1.9%.

The market tends to perform well during the summer months with July traditionally being the best month of the year for stocks.  As we said last month, market action this year will likely be tied to news regarding tariffs.  It is difficult to know what news might be coming our way, but we believe the stage is being set for some trade agreements to be inked over the next few weeks. Trump’s bill is now in the hands of the Senate and most want to see more austerity in the bill.  The primary thing Trump wants from the bill is an extension of his 2017 tax cuts, without an extension the cuts will expire at the end of this year giving us the largest tax increase in history.  In order to get an extension of the tax cuts additional spending was added and it will be challenging to roll back that spending while still getting an extension of those cuts.  The market is richly valued but we are optimistic about the future and will be buyers of tradeable dips.

If you know someone who would be interested in learning more about Greenberg Financial Group, please contact us at 520-544-4909, or visit our website at www.greenbergfinancial.com. As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance. We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:00 AM to 10:00 AM on KNST AM 790.  You can also listen to us on iHeart radio, follow us on Twitter @gbergfinancial or on Facebook under Greenberg Financial Group.  Previous radio shows are available by going to www.iheart.com or using the iHeart app and typing Money Matters with Dean Greenberg.