In May, Wall Street ended the month with green screens displaying gains in the leading indices. The Dow Jones rose by 2.3%, the Nasdaq saw a climb of 6.9%, and the S&P jumped by 4.8%, surpassing the index’s average return for May over the past decade, which was only 0.7%.
Despite historical data, some sectors within the S&P 500 index tend to produce adequate returns even during the summer months, such as the technology sector and the cyclical consumption sector. June is considered a relatively weak month for both sectors, with an average increase of just 0.5% for cyclical consumption and an average return of only 4.8% for technology in July.
While some analysts predict weaker returns in June for both sectors, others like Tom Lee of Fundstrat anticipate a jump of about 4%. Lee highlights seasonal trends and inflation moderation in the US as factors that could contribute to the positive performance of both sectors in June.
However, not all analysts share this optimism. Some, like those at Abercrombie and Morgan Stanley, foresee both sectors ending the year at lower levels than in May due to various factors such as investor sentiment, inflation rates, and market conditions that may influence their performance in coming months.
