U.S. equities concluded May with impressive performance, bucking the conventional “sell in May and go away” wisdom as the S&P 500 climbed 5.2% while the Nasdaq surged 8.4% during the month.
This robust showing challenges traditional seasonal weakness expectations, with market observers pointing to strong earnings momentum and artificial intelligence enthusiasm as primary factors sustaining upward market trends.
Key Takeaways
- S&P 500 gained 5.2%, Nasdaq up 8.4% in May
- AI earnings strength overcame seasonal sell-off concerns
- Historical data shows May averages 1.2% gains recently
Market Performance Defies Seasonal Trends
Both the S&P 500 and Nasdaq achieved fresh record closing highs on Friday, concluding what proved to be an exceptionally strong May against widespread expectations of seasonal headwinds 1. The benchmark’s 5.2% monthly advance substantially exceeded the historical norm of roughly 1.2% for May across the previous ten years 2.
The time-honored “sell in May and go away” strategy, with roots tracing to 19th-century London markets, conventionally advises investors to liquidate equity holdings during summer periods to sidestep potential underperformance. Nevertheless, recent five-year data reveals May has produced gains annually, spanning from 0.01% in 2022 to 6.2% in 2025 3.
AI Optimism Drives Technology Rally
Technology shares spearheaded the upward movement, with the sector capitalizing on impressive first-quarter results that highlighted strong artificial intelligence appetite. Aggregate Q1 earnings for reporting S&P 500 constituents exhibited 21.7% year-over-year expansion on revenues that increased 10.5%, while 80.1% exceeded earnings projections 4.
Sam Stovall, Chief Investment Strategist at CFRA, said history suggests May isn’t typically a time to abandon the market. “May has been positive 12 of the past 13 years,” Stovall noted, arguing that selling in May could cost investors potential gains from subsequent rebounds 5.
Geopolitical Factors Support Market Resilience
While persistent Middle Eastern tensions involving Iran initially weighed on markets during the opening quarter, investor confidence rebounded markedly following earnings season. Recent diplomatic progress indicating possible peace negotiations has additionally diminished geopolitical risk factors that previously pressured energy sectors and broader market sentiment.
The durability exhibited by leading indices illustrates how corporate performance metrics have trumped seasonal trading conventions. Market analysts highlight ongoing AI capital deployment and economic indicators reflecting sustained expansion as elements bolstering the market’s upward path through historically challenging summer periods.
Investment Strategy Implications
Instead of adhering to calendar-driven trading approaches, investment professionals increasingly advocate concentrating on individual corporate fundamentals and extended-term growth trajectories. May’s strong showing strengthens arguments against timing market participation based exclusively on seasonal considerations.
For those contemplating portfolio modifications, the evidence suggests maintaining positions in high-quality growth enterprises may deliver superior results compared to attempting to exploit minor seasonal market fluctuations.
Not investment advice. For informational purposes only.
References
1Sanghamitra Saha (May 8, 2026). “”Sell in May” Is Losing Its Edge: 5 ETFs to Buy”. Yahoo Finance. Retrieved May 30, 2026.
2Fidelity Viewpoints (April 30, 2026). “Sell in May and go away | Stocks | Fidelity”. Fidelity. Retrieved May 30, 2026.
3Adria Cimino (May 5, 2026). “Should You Sell Stocks in May? Here’s What History Says.”. The Motley Fool. Retrieved May 30, 2026.
4Zacks Investment Research (May 4, 2026). “”Sell in May and Go Away?” Global Week Ahead”. Zacks. Retrieved May 30, 2026.
5TheStreet (May 6, 2026). “Sell in May? History Says You’ll Miss a 16% Rally – What To Do Now”. YouTube. Retrieved May 30, 2026.