May ended on a much better note than April, with both stocks and bonds rebounding nicely over the month. Domestically, small-cap stocks joined big tech stocks at the front of the rally, driven by economic data that inspired confidence for a soft landing and future interest rate cuts. Data indicated that the economy had remained strong but showed signs of cooling with a slight uptick in unemployment and lower-than-expected inflation for the first time in three months. This news encouraged investors that the Federal Reserve’s interest rate policies have been working as intended. Yields fell and bond markets impressed as the outlook on rate cuts improved.
Internationally, stocks climbed higher as investors anticipate the European Central Bank to cut interest rates at their next meeting for the first time since 2019. Developed markets outpaced emerging markets for the month. Tensions in the Middle East, election and inflation news, and interest rate policies will continue their hold on headlines and be major market drivers as we move into the summer and look to build on strong May performance.
| Index Performance | May | Year to Date | Trailing 12 Months |
| US Stocks (Russell 3000) | 4.72% | 10.15% | 27.58% |
| International Stocks (FTSE AW ex US) | 2.89% | 5.95% | 17.41% |
| US Bond Mkt. (BBgBarc Int. Gov/Cred) | 1.21% | -0.31% | 2.67% |
| Cash (ICE BofA ML 3-Mo T-Bill) | 0.48% | 2.21% | 5.45% |