May turned out to be a win for US equity bulls

Beset with political drama in Italy, trade angst in China, a surging dollar, a plummeting Treasury yield and weakening economic data in Europe, equity investors in the US still managed to muddle through.

In fact, as far as Mays go, this was a good one, the best for the S&P 500 Index since the bull market began. The benchmark for US equities rose 2.2 per cent, the most since 2009, and the Nasdaq 100 jumped 5.5 per cent.

One big reason was the performance of technology megacaps. Apple posted its biggest monthly rally since July 2013. Then on Friday, the iPhone maker, Facebook, Amazon.com and Netflix all closed at all-time highs.

As ever, the ascent wasn’t easy. All told, the S&P 500 rose half a per cent or more for six sessions, fell the same amount in four, and spent the rest of May trading sideways. Concerns from geopolitics to trade left few obvious entry points. At the same time, investors laid off the escape button, a sign tolerance is building for political headlines that have been whipsawing markets for months.

“No strong reason to buy, but no strong reason to sell, either,” said Andrew Adams, a strategist at Raymond James & Associates Inc. “There has almost been too much uncertainty, and investors have just thrown up their hands and said, OK, we’ll worry about this stuff when there is something specific to worry about.”