American 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 historical seasonal weakness trends, with market experts highlighting strong earnings expansion and artificial intelligence enthusiasm as primary factors fueling ongoing market strength.
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, wrapping up what proved to be an exceptionally strong May despite prevailing investor worries about seasonal headwinds 1. The flagship index’s 5.2% monthly advance substantially exceeded the historical norm of roughly 1.2% for May across the previous decade 2.
The “sell in May and go away” maxim, originating from 19th-century London trading floors, conventionally advises investors to liquidate equity holdings during summer periods to sidestep underperformance. Nevertheless, evidence from the last five years reveals May has produced positive results annually, spanning from 0.01% in 2022 to 6.2% in 2025 3.
AI Optimism Drives Technology Rally
Technology equities spearheaded the upward movement, with the sector capitalizing on impressive first-quarter earnings that showcased substantial artificial intelligence appetite. Aggregate Q1 earnings for S&P 500 firms reporting results exhibited 21.7% year-over-year expansion on 10.5% revenue growth, with 80.1% surpassing 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
Notwithstanding persistent tensions surrounding Iran-related conflicts that initially weighed on markets during the first quarter, investor confidence rebounded considerably following earnings season. Recent diplomatic progress indicating possible peace negotiations has further diminished geopolitical risk premiums that had burdened energy and broader market sentiment.
The strength exhibited by major benchmarks illustrates how corporate fundamentals have trumped seasonal trading dynamics. Market observers highlight sustained AI investment trends and economic indicators showing continued expansion as elements supporting the market’s upward path through customarily weaker summer periods.
Investment Strategy Implications
Instead of adhering to calendar-driven trading approaches, market strategists progressively advocate concentrating on individual company fundamentals and extended-term growth potential. The impressive May results reinforces arguments against timing market entries and exits based exclusively on seasonal behaviors.
For investors contemplating portfolio modifications, the evidence indicates maintaining allocation to quality growth enterprises may deliver superior outcomes compared to attempting to capitalize on minor seasonal fluctuations in market returns.
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.