The U.S. stock market climbed the proverbial wall of worry in May. The month started with fresh rounds of concern about U.S. regional banks (First Republic closed on May 1^st), another rate hike by the Federal Reserve in the middle of the month, and intense negotiations around the U.S. debt ceiling towards the end of the month. Here are 3 things you need to know:

1. Technology stocks surged amidst growing excitement about the potential of artificial intelligence. The NASDAQ was up +5.9% over the month of May, taking its year-to-date gain up to +24.1%.
2. The S&P 500 only managed to post a modest +0.4% gain in May, and in equal-weighted terms the index was actually down by -3.8%, which goes to show how incredibly narrow the May stock rally was.
3. Fed officials are signaling a pause in June (they remain “data dependent”), but there is the potential for additional rate hikes later in the summer.

Sources: J.P. Morgan Asset Management – Economic Update; Bureau of Economic Analysis (www.bea.gov); Bureau of Labor Statistics (www.bls.gov); Federal Open Market Committee (www.federalreserve.gov); Bloomberg; FactSet.

Indices:

• The Bloomberg Barclays Aggregate Bond Index is a broad-based index used as a proxy for the U.S. bond market. Total return quoted.
• The S&P 500 is designed to be a leading indicator of U.S. equities and is commonly used as a proxy for the U.S. stock market. Price return quoted.
• The MSCI ACWI ex-US Index captures large and mid-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 27 emerging market countries.  The index covers approximately 85% of the global equity opportunity set outside the U.S. Price return quoted.
• The MSCI Emerging Markets Index captures large and mid-cap segments in 26 emerging markets. Price return quoted (USD).

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