The S&P 500 Index recorded its best May performance in over three decades, largely driven by the resurgence of the "Big Seven" tech giants. Companies such as Apple (AAPL, Financial), Alphabet (GOOGL), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) collectively contributed 62% of the index's gains for the month. Notably, Nvidia and Tesla led with more than 20% growth, while all but Apple surpassed the S&P 500's 6.2% gain for May.
DataTrek Research's Nicholas Colas noted that the robust performance of these tech companies signifies a genuine growth momentum in the U.S. market. Their profitability growth, significantly outpacing the rest of the S&P components, has fueled investor interest. FactSet data revealed the "Big Seven" profits grew 27.7% year-over-year in Q1, compared to 9.4% for other S&P 500 stocks.
This bullish trend has been supported by investor preference for large-cap stocks amid macroeconomic concerns, such as tariff issues and investment hesitancy. Drew Pettit from Citi highlighted this shift back to growth stocks, emphasizing their potential amid current high valuation levels. Continued high-interest rates further support this defensive growth strategy.
