Breakfast News: S&P 500's Best May Since '90

Source: Image Created by Jester AI.

1. S&P 500 Up 1.9% Last Week, Nasdaq +2%

The S&P 500 posted its strongest May for 35 years with a rise of more than 6%, regaining its earlier 2025 losses as markets bounced back after President Trump's tariff rollbacks, though further uncertainties on levies are clouding the June outlook. The Dow Jones gained 4% in May, as the Nasdaq soared nearly 10%.

• U.S. steps "seriously undermine" trade deal: China hit back against accusations it's broken the Geneva agreement, blaming the Trump administration for ramping up semiconductor export restrictions and planning to revoke Chinese student visas. The renewed tension is weighing on stock futures this morning, down around 0.5% across the board.
• Busy week for tariffs legal limbo: With the Court of Appeals' suspension of a trade court ruling against the president's tariffs in place, the administration now needs to submit briefings by June 9.

2. Aviation Sector Set to Soar?

The International Air Transport Association (IATA) paints a bright picture for aviation in 2025, predicting $36 billion net profit for the year, up from $32.4 billion in 2024. The IATA sees all-time records for revenue ($979 billion) and passenger load factor (average 84%), with profit margins rising to 3.7% from 3.4%.

• "Benefit from the reduced fuel cost": As well as efficiency improvements, the report points to cheaper aviation fuel expected to average $86 per barrel, down from $99 in 2024. Airlines have been engaging in minimal fuel hedging, so face less risk from tied-in higher costs.
• "If Indians start traveling... at the intensity of China, it's going to absolutely explode in volume internationally": Speaking to CNBC, Air India CEO Campbell Wilson said the Indian air travel market is the world's third largest and growing at an estimated 8% to 10% per year.

3. Coming Up: Rule Breakers Report

Cybersecurity specialist CrowdStrike (CRWD 2.77%) will post first-quarter earnings after Tuesday's close. Analysts expect $4.4 billion annual recurring revenue (ARR) in the current quarter, after CEO George Kurtz previously said the company is "firmly on the flight path to our $10 billion ending ARR goal."

• "No. 2 AI franchise": Oppenheimer analysts have lifted their price target on Broadcom (AVGO 0.32%) to $265, following revenue and earnings beats in Q1. The semiconductor tech giant will post Q2 earnings on Thursday, as Wall Street expects a 20% revenue rise year over year.
• Diversifying for renewed growth: DocuSign (DOCU 3.40%) will also report Q1 Thursday. Eyes will be on its Intelligent Agreement Management platform, as the fiscal 2026 outlook predicted slowing growth at Q4 2025.

4. Labor Market Cooling

The May jobs report headlines the economic news this week, with 130,000 nonfarm payroll additions expected for the month, slowing from April's 177,000. The unemployment rate looks set to remain unchanged at 4.2%. The labor market's apparent resilience hides underlying problems, according to some experts.

• "Cloudier outlook starting to weigh on hiring": How the employment market is reacting to rapidly changing trade issues will start to show, say analysts at Wells Fargo (WFC 0.21%), who think the May print will "show the cloudier outlook starting to weigh on hiring" and suggest a payroll rise of just 125,000.
• Graduate employment challenge: The millions who left education this month face a 5.3% unemployment rate for recent graduates, well above the national 4.2% average.

5. Your Take

The likes of CrowdStrike (+397%) and Broadcom (+735%) over half a decade have seen fantastic returns. Meanwhile, others haven't fared so well but may still have the backing to beat the market over the next 5 years, like DocuSign (-40%) which is a 'buy' in Stock Advisor.

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