The S&P 500 Just Had Its Best Month Since 2020. Will the Rally Continue?

In April, the S&P 500 (SPX) returned 10.4%, marking the best month for the benchmark index since November 2020. The rally was driven by a resurgence in tech stocks, with the Technology Select Sector SPDR Fund (XLK) posting an 18.2% gain.

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The S&P 500 has posted a monthly gain of at least 10% 13 times since 1950, according to Carson Investment Research. Those moves have historically been followed by further gains.

May Seasonality Adds to Bullish Setup

Following such rallies, the index has averaged a 0.2% gain over the next month and 3% over the next three months. The returns six months later are even stronger, averaging 10.2%. A year later, the gains climb to an average of 13.9%.

In addition, May has turned out to be a bullish month in recent years, despite the Wall Street adage, “Sell in May and go away.” Since 2013, the S&P 500 has averaged a 1.5% return during the month and has been positive 92.3% of the time.