Market Update: May 2024

Monthly Market Summary

• The S&P 500 Index gained +5.1%, slightly outperforming the Russell 2000 Index’s +5.0% return. Ten of the eleven S&P 500 sectors traded higher, led by Utilities.

• Corporate investment-grade bonds produced a +2.2% total return as Treasury yields fell, outperforming the corporate high-yield bond index’s +1.6% total return.

• International stock performance was varied. The MSCI EAFE developed market stock index returned +5.1%, while the MSCI Emerging Market Index returned +2.0%.

  
  

Stocks and Bonds Rebound in May Driven by Mega-Cap Technology

The S&P 500 set a new all-time high in May after trading lower in April. The technology-heavy Nasdaq 100 Index gained +6.2% and set a new all-time high, with mega-cap stocks like Nvidia, Apple, Microsoft, and Facebook-parent Meta leading the recovery. Notably, smaller companies also participated in the rally, with the Russell 2000 Index now showing positive YTD returns. In the credit market, Treasury yields reversed a portion of their April rise. The U.S. Bond Aggregate Index, which tracks a wide range of investment grade bonds, gained +1.7% as yields fell. What caused stocks and bonds to rebound after the April sell-off? The answer: Labor market and inflation data.

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