Stock Market Rally Puts S&P 500 on Track for Best May Performance Since 2009

This may not have been the year to "sell in May."

The S&P 500 index SPX was up 4.6% for the month to date through Tuesday, on track for its best May performance since a 5.3% rise in 2009 when the stock market rallied off the worst levels of the financial crisis set on March 9 of that year.

The S&P 500 averages a decline of 0.1% usually in May, according to Dow Jones Market Data, which noted that May is typically the second worst-performing month of the year.

That historical performance helps explain the popular Wall Street adage, "Sell in May and go away." The period from May to November is historically the weakest for the market, though analysts and investors have argued that it oversimplifies the phenomenon and probably shouldn't play a major role in driving investment decisions.

The $NASDAQ(.IXIC)$   posted a second straight record close on Tuesday, while the $S&P 500(.SPX)$   finished 0.3% below its record finish from May 21. The $DJIA(.DJI)$    earlier this month finished above the 40,000 milestone for the first time.

Technology stocks were in the driver's seat this month, with the sector's gain of more than 11% through Monday leading the way for the S&P 500 on continued optimism over artificial intelligence stocks. The communications services sector, which includes the behemoths benefitting from the AI boom such as $Meta Platforms, Inc.(META)$  and $Alphabet(GOOGL)$   was in second place with a gain of more than 7%.

And in one of the more stunning turns of 2024, utilities were up 6.6% through Monday as the traditional defensive play also enjoyed AI-related support. The sector, which is up around 11% for the year, has benefited from surging electricity demand tied in part to the build-out of AI data centers.

In fact, three of the S&P 500's top five performers - Vista, Constellation Energy and NRG Energy are utilities, noted analysts at Piper Sandler, in a Tuesday note. Two other AI plays, Super Micro and chip maker $NVIDIA Corp(NVDA)$   round out the top five.

Meanwhile, the Nasdaq Composite has outperformed amid the tech-led gains, up 8% for the month through Monday, its best May performance since an 8.99% gain in 2003, according to Dow Jones Markets Data. On average, the Nasdaq gains 1% in May.

The less tech-oriented Dow Jones Industrial Average was up 1.7% month to date, its strongest May performance since a 4.26% gain in 2021. May has seen an average fall of 0.1% for the blue-chip gauge and, since 1897, has been the third worst-performing month.

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