May 2023 Market Summary
May was a mixed month for stocks as the NASDAQ surged, the S&P remained about flat, and the Dow Jones Industrial Average took a hit. The NASDAQ rose 5.9% in May largely thanks to gains in the semiconductor space, notably by NVIDIA (NVDA), Advanced Micro Devices (AMD), and Broadcom (AVGO). The S&P 500 rose 0.4%, while the Dow Jones Industrial Average lost 3.2%. It was a down month around the world–Emerging Markets slipped 1.7%, and Developed Markets sank 4.1%.
Only 3 of the 11 US stock sectors were positive in May as Technology, Communication Services, and Consumer Discretionary led the way. On the flip side, Energy fell 10%, followed by Materials (down 6.9%) and Consumer Staples (down 6.2%).
Unemployment increased by 0.3 percentage points to 3.7% in May one month after reverting back to its lowest level since 1969 (3.4%). Inflation remained essentially unchanged MoM, and the Federal Reserve issued its 10th consecutive rate hike at the start of the month, bringing the Fed Funds Rate to 5.25%. Oil was down over 6.5% in May, bringing both WTI and Brent down over 41% from their highs last year.
US Treasury yields spiked sharply in May amid debt ceiling risk. The 1-Month Treasury Bill surged 0.93% to 5.28%, followed by the 3-Month at 5.52% (+0.42%) and 6-Month at 5.46% (+0.40%). Long-term bonds, such as the 10-Year, also got a lift, but its yield of 3.64% still puts it as the lowest on the curve.