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"Sell in May" lost edge as May stayed positive in 12 of the past 13 years, per Carson Group, quoted on Yahoo.
Strong Q1 earnings and AI-driven tech rally may support stocks further in May.
Defense, tech, commodities, Japan and ultra-short bonds ETFs look attractive now.
After an upbeat April, Wall Street has stepped into the so-called defamed month of May. It is called “defamed” because of the old adage, “sell in May and go away.” The idea was simple: trim equity exposure after April and return later in the year, typically around October or November, to avoid weaker summer performance.
However, the old Wall Street saying – “sell in May and go away” – once carried weight. Today, it looks increasingly outdated. Instead of protecting gains, stepping out of the market in May has often meant missing further upside, as quoted on Yahoo Finance.
With April recouping Iran-war losses seen in March and bouncing back strongly, Wall Street will be striving hard to continue this ascent in May. Ryan Detrick of Carson Group noted that May has been positive 12 of the past 13 years, as quoted on the above-mentioned Yahoo Finance article.
Looking at data from 1988 to 2025
May has averaged a gain of about 1.2%, outperforming roughly half the calendar months. August and September stand out as the only months with negative average returns, the same Yahoo Finance article indicated. The S&P 500-based ETF SPY has gained about 2.7% over the past week (as of May 6, 2026).
Why You Should Not Sell in May?
U.S. President Donald Trump recently said he had “very good talks” with Iran, adding that “it’s very possible we’ll make a deal”, as quoted on Al Jazeera. While uncertainty related to the sustainability of any ceasefire remains in place, any hope should work in favor of the market.
Moreover, if the U.S. economy begins to show back-to-back weak releases amid the Iran war that trigger economic concerns, the Fed may act in a dovish or less-hawkish manner. The April bounce in the stock market is likely to continue into May as investors have become accustomed to the impact of the Iran war.
Upbeat Earnings Picture
Total Q1 earnings for the 392 S&P 500 companies that have already reported results are up +21.7% from the same period last year on +10.5% higher revenues, with 80.1% beating EPS estimates and 77.8% beating revenue estimates. This is a better showing from these companies relative to other recent periods, per Earnings Trends (read: Forget Geopolitics: Bet on Earnings Growth & Invest in These Sector ETFs).
For 2026 Q2, total S&P 500 earnings are expected to increase +20.8% from the same period last year on +10.1% higher revenues. Estimates for Q2 have steadily moved higher in recent weeks, with the current +20.8% growth rate up from +17.1% at the end of March, per the Earnings Trends issued on May 6, 2026.
Against this backdrop, we highlight a few ETFs that could shower gains on investors in an otherwise defamed May.
The Aerospace & Defense sector should remain strong and has the potential to stay steady in the coming days. Continued geopolitical tension, increased defense budgets, and reasonable valuations are tailwinds for the sector.
According to recent data from the Stockholm International Peace Research Institute (SIPRI), global military expenditure reached a record $2.89 trillion in 2025, marking a 2.9% rise. As a share of GDP, global military spending climbed to 2.5%, its highest level since 2009(read: Defense ETFs to Buy as Global Military Spending Rises 2.9%).
State Street Technology Select Sector SPDR ETF (XLK - Free Report)
The Tech sector is expected to log a substantial 50.1% earnings growth in Q1 along with 25% expected revenue growth. The AI boom has continued to fuel the tech rally. Increased capex should further support the sector.
PIMCO Enhanced Short Maturity Active ETF (MINT - Free Report)
Volatility is the name of the game this year, thanks to the Iran war. Due to these uncertainties, money market-based ETFs may gain. Investors should note that ultra-short-term bond ETFs have lower interest rate risks.
Hence, cash and short-dated fixed income probably have played a greater role in adding stability to a portfolio. MINT has offered a flat return this year, but it yields 4.42% annually (read: Equal Asset Allocation Can Beat the Market? ETF Focus).
Invesco DB Commodity Index Tracking Fund (DBC - Free Report)
The commodity sector has been an area to watch lately, as supply disruptions through the Strait of Hormuz have driven prices of commodities higher. Due to geopolitical risk premiums, and safe-haven buying, commodities are rallying, especially in energy and metal markets.
Japan’s benchmark Nikkei 225 hit the 62,000-mark for the first time as Asia-Pacific markets rallied on Wednesday despite renewed tensions in the Middle East. The tech rally mainly aided the space. Prime Minister Sanae Takaichi is also in favor of the fiscal policy boost. Also, signs of cooling inflation may lead the BoJ to not hike rates in the near term (read: Time for Japan ETFs as Inflation Cools for Fourth Straight Month?).
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"Sell in May" Is Losing Its Edge: 5 ETFs to Buy
Key Takeaways
After an upbeat April, Wall Street has stepped into the so-called defamed month of May. It is called “defamed” because of the old adage, “sell in May and go away.” The idea was simple: trim equity exposure after April and return later in the year, typically around October or November, to avoid weaker summer performance.
However, the old Wall Street saying – “sell in May and go away” – once carried weight. Today, it looks increasingly outdated. Instead of protecting gains, stepping out of the market in May has often meant missing further upside, as quoted on Yahoo Finance.
With April recouping Iran-war losses seen in March and bouncing back strongly, Wall Street will be striving hard to continue this ascent in May. Ryan Detrick of Carson Group noted that May has been positive 12 of the past 13 years, as quoted on the above-mentioned Yahoo Finance article.
Looking at data from 1988 to 2025
May has averaged a gain of about 1.2%, outperforming roughly half the calendar months. August and September stand out as the only months with negative average returns, the same Yahoo Finance article indicated. The S&P 500-based ETF SPY has gained about 2.7% over the past week (as of May 6, 2026).
Why You Should Not Sell in May?
U.S. President Donald Trump recently said he had “very good talks” with Iran, adding that “it’s very possible we’ll make a deal”, as quoted on Al Jazeera. While uncertainty related to the sustainability of any ceasefire remains in place, any hope should work in favor of the market.
Moreover, if the U.S. economy begins to show back-to-back weak releases amid the Iran war that trigger economic concerns, the Fed may act in a dovish or less-hawkish manner. The April bounce in the stock market is likely to continue into May as investors have become accustomed to the impact of the Iran war.
Upbeat Earnings Picture
Total Q1 earnings for the 392 S&P 500 companies that have already reported results are up +21.7% from the same period last year on +10.5% higher revenues, with 80.1% beating EPS estimates and 77.8% beating revenue estimates. This is a better showing from these companies relative to other recent periods, per Earnings Trends (read: Forget Geopolitics: Bet on Earnings Growth & Invest in These Sector ETFs).
For 2026 Q2, total S&P 500 earnings are expected to increase +20.8% from the same period last year on +10.1% higher revenues. Estimates for Q2 have steadily moved higher in recent weeks, with the current +20.8% growth rate up from +17.1% at the end of March, per the Earnings Trends issued on May 6, 2026.
Against this backdrop, we highlight a few ETFs that could shower gains on investors in an otherwise defamed May.
ETFs in Focus
Invesco Aerospace & Defense ETF (PPA - Free Report)
The Aerospace & Defense sector should remain strong and has the potential to stay steady in the coming days. Continued geopolitical tension, increased defense budgets, and reasonable valuations are tailwinds for the sector.
According to recent data from the Stockholm International Peace Research Institute (SIPRI), global military expenditure reached a record $2.89 trillion in 2025, marking a 2.9% rise. As a share of GDP, global military spending climbed to 2.5%, its highest level since 2009(read: Defense ETFs to Buy as Global Military Spending Rises 2.9%).
State Street Technology Select Sector SPDR ETF (XLK - Free Report)
The Tech sector is expected to log a substantial 50.1% earnings growth in Q1 along with 25% expected revenue growth. The AI boom has continued to fuel the tech rally. Increased capex should further support the sector.
PIMCO Enhanced Short Maturity Active ETF (MINT - Free Report)
Volatility is the name of the game this year, thanks to the Iran war. Due to these uncertainties, money market-based ETFs may gain. Investors should note that ultra-short-term bond ETFs have lower interest rate risks.
Hence, cash and short-dated fixed income probably have played a greater role in adding stability to a portfolio. MINT has offered a flat return this year, but it yields 4.42% annually (read: Equal Asset Allocation Can Beat the Market? ETF Focus).
Invesco DB Commodity Index Tracking Fund (DBC - Free Report)
The commodity sector has been an area to watch lately, as supply disruptions through the Strait of Hormuz have driven prices of commodities higher. Due to geopolitical risk premiums, and safe-haven buying, commodities are rallying, especially in energy and metal markets.
WisdomTree Japan Hedged Equity Fund (DXJ - Free Report)
Japan’s benchmark Nikkei 225 hit the 62,000-mark for the first time as Asia-Pacific markets rallied on Wednesday despite renewed tensions in the Middle East. The tech rally mainly aided the space. Prime Minister Sanae Takaichi is also in favor of the fiscal policy boost. Also, signs of cooling inflation may lead the BoJ to not hike rates in the near term (read: Time for Japan ETFs as Inflation Cools for Fourth Straight Month?).