May 2025 Monthly Market Review

An excerpt from our May 2025 Monthly Market Review: 

After riding a roller coaster in April, U.S. equities rocketed higher in May, gaining over 6%. Wild swings in tariff policy remained the main driver of the ebb and flow of sentiment. Despite all the movement, U.S. equities are up only about 1% so far this year. Both advanced and emerging non-U.S. equity markets also enjoyed strong gains in May and have handily outperformed U.S. equities this year, helped in no small part by the depreciation of the U.S. dollar. With the Fed on hold in the face of an uncertain macroeconomic backdrop, the Treasury yield curve steepened in May as longer term rates rose. The move was modest, however, despite the downgrading by Moody’s of the U.S. government’s credit rating and pending legislation proposing a massive widening of the fiscal deficit. Credit spreads across the rating spectrum remained tight. The U.S. dollar depreciated further despite a widening yield differential over other currencies. Oil prices jumped in May but remain sharply lower so far this year.