May Highlights
- S&P 500 up 5.6% in May on broad gains and strong Q1 earnings.
- 78% of S&P 500 beat estimates, led by 27.7% growth from the "Magnificent 7."
- Global stimulus ramps up, led by Germany’s €1T fiscal shift.
US Markets
U.S. equities led global markets higher in May, with the S&P 500 gaining 5.63% amid a broad-based rally. While the information technology sector continued to lead performance, cyclical areas such as industrials and consumer discretionary also posted strong gains—signaling improving market breadth. This rebound lifted the index to a modest year-to-date return of 1.1%, reversing earlier weakness in the first quarter.
The rally was underpinned by a solid first-quarter earnings season. As of month-end, 98% of S&P 500 constituents have reported results for Q1 2025. Of these, 78% delivered earnings per share above consensus estimates—exceeding both the 5-year average (77%) and the 10-year average (75%). Notably, the so-called “Magnificent 7” contributed meaningfully to aggregate index earnings, posting year-over-year earnings growth of 27.7%. While this represents a slight deceleration from the 32.1% average growth seen over the prior three quarters, it remains a strong signal of earnings durability among market leaders1.
US Economy
Consumer spending remains the cornerstone of the U.S. economy, accounting for just under 70% of GDP. As such, it continues to serve as a key barometer for overall economic health. In the first quarter of 2025, real personal consumption expenditures rose by 1.8% quarter-over-quarter. While Q1 is historically the weakest period for consumption—due to post-holiday moderation and seasonal behavior ahead of summer travel—the data reflects a stable consumer backdrop. Inflation remains a central focus. The Consumer Price Index (CPI) rose 2.3% year-over-year in April, with a modest 0.2% increase month-over-month. Core CPI, which excludes food and energy, increased by 2.8% over the prior year. Looking ahead, the impact of newly implemented tariffs on consumer prices is expected to unfold gradually.
Global Markets
On the policy front, global fiscal stimulus efforts are accelerating and may provide an important counterbalance to slowing growth and geopolitical uncertainty. In North America, Canada has proposed tax reductions and expanded government spending to stimulate demand. Similarly, Australia has announced tax relief and energy subsidies aimed at easing pressure on households. Japan has committed to a ¥980 billion ($6.3 billion) stimulus package to support businesses and consumers impacted by the latest round of U.S. tariffs. Of particular significance is Germany’s pivot away from fiscal austerity. In the first half of 2025, German lawmakers approved what may ultimately amount to €1 trillion in stimulus—representing a potential turning point for European fiscal policy2. Should other eurozone countries follow suit, the region could see a broad-based fiscal impulse not witnessed in over a decade. As global monetary policy remains constrained, fiscal expansion may become a more prominent lever for sustaining economic growth across developed markets.
Mike has been in the wealth management industry for 10 years, beginning his career at BNY Mellon’s Silicon Valley office. There, he learned the intricacies of wealth management and discovered his passion for helping families achieve their financial goals. He later became a Portfolio Manager at an ultra-high net worth RIA in Boston, where he honed his skills in developing custom investment strategies for clients. Inspired by Savvy’s mission to bring a tech-focused energy to the wealth management industry, Mike joined the firm in July 2022 to drive the launch and continued evolution of their advisory capabilities. At Savvy, Mike has played a key role in developing, launching, and managing the in-house investment solution, Savvy Wealth Investment Management (“SWIM”). He also leads Savvy’s Client Experience Team, partnering closely with associates and advisors and aimed at producing best-in-class services for their clients. Mike is a graduate of Northeastern University and holds his Certified Financial Planner™ (CFP®) designation. He resides in New York with his wife, Alex, and their golden retriever, Bondi.
David Gao is an investment professional at Savvy with deep expertise in portfolio management and trading strategies. He graduated with honors from the University of Utah’s David Eccles School of Business, earning dual degrees in Finance and Economics. Before joining Savvy Wealth, David led trading operations exceeding $1 billion at Campbell Wealth Management, where he also designed and implemented an options covered call strategy. At United Capital Family Office, he played a key role in portfolio allocation, leveraging proprietary algorithms and advanced risk management techniques. He began his career at Goldman Sachs, where he built a strong foundation in investment research and analytics.
Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy.
Savvy Wealth Inc. is a technology company. Savvy Advisors, Inc. is an SEC registered investment advisor. For purposes of this article, Savvy Wealth and Savvy Advisors together are referred to as “Savvy”. All advisory services are offered through Savvy Advisors, while technology is offered through Savvy Wealth. The views and opinions expressed herein are those of the speakers and authors, and do not necessarily reflect the views or positions of Savvy Advisors.
Sources:
2. https://www.schwab.com/learn/story/international-stock-market-outlook
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