The stock market saw a strong rebound in May, with major indexes reaching new highs on Tuesday. The Nasdaq Composite closed at its highest price ever, reaching 16,511, surpassing its previous record set in April. The S&P 500 and the Dow Jones Industrial Average also closed near their respective all-time highs set in March, with gains of 0.5% and 0.4% respectively on Tuesday.
So far in May, the Nasdaq has gained 5.4%, the Dow has rallied 4.6%, and the S&P has risen 4.2%. The rally has been led by massive technology companies, with each of the six trillion-dollar West Coast firms seeing gains of at least 5% this month. Apple stock led the way with a 10% gain. The top-weighted stocks on the Dow, UnitedHealth, and Goldman Sachs, also saw gains of around 7%, contributing to the market’s overall rally.
April was a challenging month for the stock market, with the Dow experiencing its worst performance since September 2022, while the S&P and Nasdaq had their worst months since September 2023. Investors were concerned about the impact of inflation and the potential for higher interest rates, worries that are still prevalent ahead of the release of April inflation data on Wednesday. Despite these concerns, investors are optimistic about companies’ profit potential, with recent quarterly earnings reports showing the best profit growth since the second quarter of 2022.
The market rally in May has also coincided with a resurgence of meme stocks, with shares of AMC and GameStop, two popular meme stock darlings from 2021, seeing significant gains. AMC’s shares are up 135%, while GameStop’s shares have risen 179% this week, largely due to increased activity on social media platforms. This enthusiasm from retail investors has added to the positive sentiment in the market.
Overall, the stock market has rebounded strongly in May, with major indexes reaching new highs and posting significant gains. The tech-heavy Nasdaq led the way, closing at a record high, while the S&P 500 and the Dow Jones Industrial Average also closed near their all-time highs. Despite lingering concerns about inflation and interest rates, investors remain optimistic about companies’ profit potential, supported by strong quarterly earnings reports. The resurgence of meme stocks has added to the market’s momentum, as retail investors continue to show enthusiasm for certain stocks.
