Welcome to the May edition of The Broadcast!
Market Update – May 2025
When last we spoke (ok, I typed and you read – but you get my drift), the Warriors were up 3–2 against the Rockets, Steph Curry was healthy and the stock market had pulled a late-April Jimmy Buckets and did a whole lot of winning to end the month...
Fast forward a few weeks: the Warriors are out, Steph’s hamstring betrayed us all and Moody’s downgraded U.S. credit. Somehow, the stock market didn’t flinch. In fact, it rallied. The Nasdaq dominated, returning 9.6% for the month. The S&P 500 wasn't far behind, netting a 6.2% gain in May—its best month since 2023—erasing all its year-to-date losses in the process.
Investors ignored the usual chaos: debt ceiling drama, a $2.8 trillion tax extension bill and warnings about America’s rising debt load. Instead, they focused on what’s been quietly going right – inflation falling to 2.3%, strong corporate earnings (especially in tech) and a labor market that just won’t quit.
Meanwhile, gold and Bitcoin hit all-time highs, the dollar slipped to a three-year low and bond yields bounced around as traders tried to make sense of the long-term fiscal picture.
Here’s how May shook out:
- S&P 500: +6.2% in May, +0.5% YTD
- Dow: +3.9% in May, -0.6% YTD
- Nasdaq: +9.6% in May, -1.0% YTD
- Bonds: -0.7% in May, +2.4% YTD
- Gold: +24% YTD, closing at $3,288
- Bitcoin: Topped $111K, ended at $104K
- Inflation: 2.3%, lowest since 2020
- Jobs: +177K added in April, unemployment holding at 4.2%
The broader takeaway? Markets, like playoff teams, don’t need perfect conditions to win – they just need momentum (and a key trade or two). For long-term investors, May was a reminder that the best months often show up when you're least expecting them.
And then there was trade!
The U.S. cut short-term deals with both the U.K. and China, including a 90-day pause on tariffs. Sounds good, right? But within days, both sides were accusing each other of breaking the terms. A federal court even questioned whether some of the new tariffs had gone too far. All of this adds up to... well, more uncertainty.
If you’re looking for an analogy, think of trade policy like a high-profile sports trade.
- Sometimes it works out beautifully (Jeff Kent to the Giants and Christian McCaffrey to the 49ers anyone?!?)
- Sometimes it’s a disaster (The Warriors sending future Hall of Famer Robert Parish and the draft pick that ended up being Kevin McHale (another Hall of Famer) to the Celtics - double yikes!)
- And sometimes it’s just weird (Joe Montana in Kansas City, Willie Mays in a Mets uniform... let’s never speak of either of these again.)
Like sports trades, economic deals don’t need perfect timing – they need staying power. Some of the most impactful outcomes come from trades that didn’t – or maybe shouldn’t – happen (looking at you, Robert Parish and the pick that became Kevin McHale). Others deliver immediate returns – like Christian McCaffrey lighting it up the second he suited up for the Niners. And some, like Jeff Kent’s rise in San Francisco, take time to pay off but turn out to be franchise-changing.
What we’re seeing now is the economic equivalent of GMs negotiating trades with the cameras rolling. Most of the time, deals get hammered out quietly behind the scenes. But with the Trump administration, the playbook’s gone public – statements, tweets and tariff threats front and center. What’s actually happening behind closed doors? No one really knows. But like in sports, what matters isn’t the noise – it’s whether the right deals get done. Some may pay off immediately, some could age well and others… we’ll regret before the ink dries.
Bottom line:
Anyone who stayed invested through April’s volatility – and I know that includes all of you – was rewarded in May. It’s a perfect example of why long-term investing works: the best months often show up when they’re least expected. Success isn’t about timing every move – it’s about staying in the game, even when the star player goes down with a terrible hamstring injury (or worse, gets traded away in their prime).
Until next time, take good care!
