The US stock markets experienced a historic surge at the beginning of May 2025, particularly driven by the S&P 500. The leading index closed in the green for nine consecutive trading days – the longest winning streak since 2004. At the same time, the Dow Jones and the Nasdaq Composite recorded substantial gains, with the Nasdaq rising to 17,997 points (+1.6%).
Drivers of the Record Rally
- Labor Market Data: The unexpectedly positive April employment report eased recession fears and boosted economic confidence.
- Trade Optimism: Hopes for constructive discussions between the US and China, as well as progress in EU trade negotiations, fueled the market. China signaled its willingness to negotiate to avoid a trade war, particularly regarding fentanyl trade.
Significance for European Investors
- Portfolio Diversification: The ongoing strength of the S&P 500 underscores the attractiveness of US stocks as a stabilizer in global portfolios.
- Risk Assessment: The combination of a robust labor market and diplomatic progress reduces short-term downside risks, which could favor inflows of capital from Europe.
- Sectoral Impulses: Technology stocks (Nasdaq) and cyclical sectors benefit particularly – a signal for European investors to reassess their allocation in growth stocks.
The recent rise in prices reflects a rare constellation of macroeconomic relaxation signals, which also open new strategic options for international investors.