May market recap: Progress in fits and starts

May market recap: Progress in fits and starts

06.10.2025

Stocks experienced a robust rebound in May despite ongoing trade uncertainty. The S&P 500 gained over 6%, posting its best month since late 2023. Some of the tariffs with China and the EU were granted temporary reductions, prompting many investors to calculate that trade related outcomes won’t be as disruptive as was feared last month. Still, most of the original reciprocal tariffs remain due to be reinstated on July 9 unless new deals are reached.

Tech rebound

The Magnificent Seven, which suffered significant losses during the volatility in early April, led the rebound. Nvidia punctuated the theme, announcing strong earnings late in the month and affirming continued exceptional demand for its GPU chips. The share price for the leader of the AI movement is again positive for the year after being down as much as 30% in April. 

Bond blip

Enthusiasm in the equity markets was not mirrored in bonds as concerns about U.S. debt levels intensified. While still positive for the year, the U.S. aggregate bond market lost 0.6% in May, with greater losses in longer maturity issues. Increasing debt levels are a long-term concern, but we believe diversified bond exposures will continue to generate income and provide portfolio stability for the foreseeable future.  

New tax bill takes to the Senate

Progress was made on a new tax bill which would extend many of the 2017 cuts. The “One Big Beautiful Bill Act” was passed by the House and now sits for consideration with the Senate. President Trump has expressed a desire to get a bill passed by July 4.  While generally supportive for short term economic growth, the current version won’t have a big impact on most individuals’ tax situation. As it stands now, some overtime and tipped income are to be excluded from federal income tax while the state and local tax deduction cap rises from $10,000 to $40,000, subject to an income phase out above $500,000. Significant cuts to Medicaid and the Nutrition Assistance Program are also proposed. All of this is subject to change as the legislation moves through the Senate.      

Get financially happy

Put your money to work for life and play

RO4570699-0625

Craig Birk, CFP®

Contributor

Craig Birk is the Chief Investment Officer for Empower Personal Wealth. A CERTIFIED FINANCIAL PLANNER™ professional, he is responsible for Empower’s retail investment portfolio, providing strategic and executive direction to drive the optimal management of client assets.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. No part of this blog, nor the links contained therein is a solicitation or offer to sell securities. Compensation for freelance contributions not to exceed $1,250. Third-party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third-party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Empower of the contents on such third-party websites. This article is based on current events, research, and developments at the time of publication, which may change over time.

Certain sections of this blog may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Past performance is not a guarantee of future return, nor is it indicative of future performance. Investing involves risk. The value of your investment will fluctuate and you may lose money. 

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.