S&P 500 Defies Gravity: How Tariff Truce and Tech Surge Create a Golden Opportunity

The S&P 500's dramatic turnaround in May 2025—from the brink of a bear market to its strongest monthly performance in decades—has upended a centuries-old market adage: “Sell in May and go away.” While April's tariff-driven selloff left investors skittish, May's surge of over 6%—its best May since 1990—signals that this market is primed for strategic buying. Behind the rebound lies a rare confluence of geopolitical resolution, tech-sector fireworks, and corporate earnings that could power gains well into summer.

The Tariff Truce: A Catalyst for Calm

The S&P 500's May rally was born from uncertainty and nurtured by clarity. In April, President Trump's abrupt 34% tariff threat on Chinese goods triggered a historic $2.3 trillion market wipeout, with the energy sector collapsing 13.7%. But a May federal court ruling—a rare check on executive power—paused the tariffs, erasing a key overhang.

The ruling didn't just halt tariffs; it reset expectations. shows how May's gains erased April's losses and more. Investors now bet that cooler heads will prevail in ongoing trade talks, reducing the risk of a full-blown trade war. With the Fed holding rates steady and inflation cooling to 2.6%, the stage is set for a prolonged recovery.

Tech's Triumph: AI Ignites a Sector-Driven Rally

The May rebound wasn't a broad-based rally—it was a tech-fueled explosion.

symbolizes the era-defining shift. Nvidia's Q1 revenue surged 69% to $44 billion, powered by AI demand, propelling its shares higher and lifting the Nasdaq nearly 10% in May.

This isn't just about one stock. Microsoft, Amazon, and Broadcom all surged as AI adoption accelerated, proving that tech's dominance isn't fleeting. Even as Apple and Alphabet lagged, the sector's overall strength defied the “sell in May” mantra. Historically, the S&P 500 has gained just 1.5% on average between May and October—this year, May alone beat that.

Busting the Sell-in-May Myth

The “sell in May” adage, rooted in seasonal volatility, has lost relevance in an era of geopolitical tailwinds and tech-driven growth. In May 2025, the market didn't just beat expectations—it rewrote them. The S&P 500's 6% gain not only erased April's losses but pushed its YTD decline to just -2.3%, narrowing the path to recovery.

Critically, May's gains weren't a fluke. Earnings reports revealed resilience: the S&P 500 posted 12.4% Q1 earnings growth, with tech leading the charge. Even energy, battered by tariffs, stabilized as oil prices rebounded. Meanwhile, the Fed's resolve to keep rates high—even amid White House pressure—sends a signal: this recovery is built on fundamentals, not stimulus.

Why Now Is the Time to Buy

The market's May surge isn't just a correction—it's a setup. Three factors make this a rare buying opportunity:
1. Tariff Risk Mitigation: While trade tensions linger, the court's ruling and softer corporate guidance suggest a path to resolution.
2. Tech's AI Momentum: The AI boom is real and accelerating. Companies like Nvidia are just the tip of the iceberg.
3. Seasonal Contrarian Edge: Historically weak summer months could see sustained gains if trade talks progress.

underscores this point: AI's trajectory is upward, and the S&P 500 is positioned to ride it.

Act Now: A Strategic Entry Point

For investors, the message is clear: the S&P 500's May rebound isn't a blip. It's a signal. With trade risks easing, tech leading the charge, and earnings defying tariff headwinds, this is a pivotal moment to deploy capital.

Focus on sectors and companies positioned to win in a tech-driven, post-tariff world. The Nasdaq's 10% May surge hints at the upside, but broader market exposure—via S&P 500 ETFs—offers balance. Avoid lagging sectors like energy unless oil prices rebound decisively.

The “sell in May” myth is dead. In its place stands a market ready to defy gravity. The next move? Buy now—before the rally becomes a stampede.

Investor takeaway: The S&P 500's May surge, fueled by tariff relief and tech's AI boom, presents a rare buy opportunity. Deploy capital strategically to capitalize on this seasonally contrarian upside.