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Wall Street made a strong comeback in May, reversing early April losses triggered by the “Liberation Day” tariffs. Investors who have embraced the "buy the dip" strategy have been rewarded handsomely, with the S&P 500 delivering its strongest post-pullback returns in over three decades.
Positive trade developments, solid tech earnings, and a resilient economy lifted investor sentiment and fueled the rally. The S&P 500 added about 4% over the past month (as of May 30, 2025), the Dow Jones gained 2.3%, the Nasdaq advanced 6.3% and the Russell 2000 added 2.3%.
Easing Trade Tensions Provides Relief
Following the initial tariff-induced downturn, signs of trade de-escalation began to emerge. The United States temporarily reduced tariffs on Chinese goods from 145% to 30%, while China responded by lowering its retaliatory duties on U.S. imports from 125% to 10%. This 90-day reduction period has helped ease investor concerns.
Additionally, President Trump postponed a 50% tariff hike on EU goods, delaying implementation from June 1 to July 9. This move accelerated trade negotiations with European partners.
Economic Resilience Supports Market Strength
Encouraging economic data further supported the bullish tone. Consumer confidence improved in May after five consecutive months of decline. Inflation also eased, with the Consumer Price Index (CPI) rising just 2.3% year over year in April — the lowest reading since February 2021.
Meanwhile, the labor market remained strong. The U.S. economy added 177,000 jobs in May, surpassing expectations, while the unemployment rate held steady at 4.2%. These figures reassured investors of continued economic stability.
Strong Tech Earnings Lead the Charge
First-quarter earnings reports from 477 S&P 500 companies showed an 11.4% increase in profits compared to the same period last year, with revenues up 4.4%. Approximately 74.2% of companies exceeded earnings per share (EPS) expectations, and 62.9% surpassed revenue estimates, according to the latest Earnings Trends.
While some sectors struggled, the technology sector stood out. Tech companies reported strong earnings growth, with revenue beats exceeding the five-year average, bolstering market optimism.
Ongoing Risks and Elevated Valuations
Despite recent gains, risks remain. Uncertainty over Trump’s tariff policies prevails, especially after some tariffs were deemed unlawful in court, only to be reinstated temporarily on appeal. This legal tug-of-war has added market volatility.
Moreover, the rapid rebound has pushed valuations higher. The S&P 500 is now trading at over 22 times projected 2025 earnings. Analysts warn that without sustained positive developments, such high valuation levels may be difficult to sustain.
Broad-Based Rally: Top ETF Performers
The market surge was broad-based, with several exchange-traded funds (ETFs) emerging as top performers across various sectors. Five standout ETFs over the past month include:
Ethereum prices gained 37.9% past month. The rally on Ethereum came from technological developments that caused much excitement among traders.
Income-Focused
YieldMax CVNA Option Income Strategy ETF (CVNY - Free Report) – Up 28.5%
Carvana (CVNA) shares gained 30% past month. The YieldMax CVNA Option Income Strategy ETF is an actively managed fund that seeks to generate monthly income by writing call options on CVNA (read: Tap Income ETFs Amid Trump Tariffs' Legal Trouble).
CVNY employs a synthetic covered call strategy, which involves buying and selling a mix of call and put option contracts based on Carvana's stock. This strategy aims to generate current income from option premiums. The ETF CVNY yields 32.30% annually and charges 99 bps in fees.
Global X Uranium ETF provides investors access to a broad range of companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries.
Climate change initiatives, global militarization and a widening supply-demand deficit boosted uranium prices. Uranium is a key component in nuclear power generation.
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4 ETF Areas Up At Least 25% in May
Wall Street made a strong comeback in May, reversing early April losses triggered by the “Liberation Day” tariffs. Investors who have embraced the "buy the dip" strategy have been rewarded handsomely, with the S&P 500 delivering its strongest post-pullback returns in over three decades.
Positive trade developments, solid tech earnings, and a resilient economy lifted investor sentiment and fueled the rally. The S&P 500 added about 4% over the past month (as of May 30, 2025), the Dow Jones gained 2.3%, the Nasdaq advanced 6.3% and the Russell 2000 added 2.3%.
Easing Trade Tensions Provides Relief
Following the initial tariff-induced downturn, signs of trade de-escalation began to emerge. The United States temporarily reduced tariffs on Chinese goods from 145% to 30%, while China responded by lowering its retaliatory duties on U.S. imports from 125% to 10%. This 90-day reduction period has helped ease investor concerns.
Additionally, President Trump postponed a 50% tariff hike on EU goods, delaying implementation from June 1 to July 9. This move accelerated trade negotiations with European partners.
Economic Resilience Supports Market Strength
Encouraging economic data further supported the bullish tone. Consumer confidence improved in May after five consecutive months of decline. Inflation also eased, with the Consumer Price Index (CPI) rising just 2.3% year over year in April — the lowest reading since February 2021.
Meanwhile, the labor market remained strong. The U.S. economy added 177,000 jobs in May, surpassing expectations, while the unemployment rate held steady at 4.2%. These figures reassured investors of continued economic stability.
Strong Tech Earnings Lead the Charge
First-quarter earnings reports from 477 S&P 500 companies showed an 11.4% increase in profits compared to the same period last year, with revenues up 4.4%. Approximately 74.2% of companies exceeded earnings per share (EPS) expectations, and 62.9% surpassed revenue estimates, according to the latest Earnings Trends.
While some sectors struggled, the technology sector stood out. Tech companies reported strong earnings growth, with revenue beats exceeding the five-year average, bolstering market optimism.
Ongoing Risks and Elevated Valuations
Despite recent gains, risks remain. Uncertainty over Trump’s tariff policies prevails, especially after some tariffs were deemed unlawful in court, only to be reinstated temporarily on appeal. This legal tug-of-war has added market volatility.
Moreover, the rapid rebound has pushed valuations higher. The S&P 500 is now trading at over 22 times projected 2025 earnings. Analysts warn that without sustained positive developments, such high valuation levels may be difficult to sustain.
Broad-Based Rally: Top ETF Performers
The market surge was broad-based, with several exchange-traded funds (ETFs) emerging as top performers across various sectors. Five standout ETFs over the past month include:
Semiconductor
STKd 100% SMCI & 100% NVDA ETF (SPCY - Free Report) – Up 42.6%
STKd 100% NVDA & 100% AMD ETF (LAYS) – Up 37.4%
NVIDIA’s (NVDA - Free Report) market-pleasing earnings released last week boosted the stock price. NVIDIA shares gained 21.1% past month. Advanced Micro Devices (AMD) shares gained 14.6% past month. Super Micro Computer (SMCI) shares advanced 22.3% past month.
Ethereum
Bitwise Ethereum ETF (ETHW - Free Report) – Up 39.6%
VanEck Ethereum ETF (ETHV) – Up 39.6%
Ethereum prices gained 37.9% past month. The rally on Ethereum came from technological developments that caused much excitement among traders.
Income-Focused
YieldMax CVNA Option Income Strategy ETF (CVNY - Free Report) – Up 28.5%
Carvana (CVNA) shares gained 30% past month. The YieldMax CVNA Option Income Strategy ETF is an actively managed fund that seeks to generate monthly income by writing call options on CVNA (read: Tap Income ETFs Amid Trump Tariffs' Legal Trouble).
CVNY employs a synthetic covered call strategy, which involves buying and selling a mix of call and put option contracts based on Carvana's stock. This strategy aims to generate current income from option premiums. The ETF CVNY yields 32.30% annually and charges 99 bps in fees.
Uranium
Global X Uranium ETF (URA - Free Report) – Up 26.5%
Global X Uranium ETF provides investors access to a broad range of companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries.
Climate change initiatives, global militarization and a widening supply-demand deficit boosted uranium prices. Uranium is a key component in nuclear power generation.