The month of May ended on a positive note on Wall Street, with significant increases in the leading indices. The Dow Jones saw a rise of 2.3%, the Nasdaq climbed by 6.9%, and the S&P jumped by 4.8%, surpassing the average return for May over the past decade. Looking ahead to June, there is an expectation that the upward trend will continue, with macro events in the US driving the market. Some experts predict that the main indices could see returns of around 4%.
Historically, the summer months tend to see weaker increases in the S&P 500 index, with June often being one of the worst months for Wall Street in the past 10 years. However, certain sectors within the index, such as technology and cyclical consumption, have shown consistent returns even during the summer. For example, while June may be a weaker month for the technology sector, July tends to be strong with an average increase of 4.8%. Similarly, the cyclical consumption sector sees an average increase of 4.5% in July, its strongest month.
Despite the historical trends, there are analysts like Tom Lee who believe that the S&P 500 could see a jump of about 4% in June. Lee points to factors such as a seasonal bull market, moderation of inflationary pressures in the US, low levels of investor loans for trade, and strong financial results in the first quarter as reasons for his forecast. However, not all analysts share this optimism, with some predicting a decline in the index by the end of the year.
Overall, there are conflicting opinions on how the market will perform in the coming months, but many are closely watching key factors such as inflation rates, investor sentiment, and corporate earnings to gauge the future direction of Wall Street.