NEW YORK — The S&P 500 enters May at a record high after closing out a powerful April rebound and extending gains Friday, May 1, 2026. The advance has been driven by stronger corporate profits and renewed confidence in technology shares, but investors now face a key test from jobs data, Federal Reserve policy and oil-market risk.
The benchmark index rose 21.11 points, or 0.3 percent, to 7,230.12 on Friday, while the Nasdaq composite gained 0.9 percent to 25,114.44 and the Dow Jones Industrial Average slipped 0.3 percent, according to AP market close data. For the year, the S&P 500 is up 5.6 percent, a gain that has helped weaken the instinctive seasonal call to “sell in May and go away.”
Why the S&P 500 faces a May credibility test
April’s rally was not small. The S&P 500 climbed more than 10 percent in April and the Nasdaq jumped more than 15 percent, giving both indexes their strongest monthly gains since 2020, Reuters reported in its Wall Street week-ahead analysis. That momentum leaves less room for disappointment as more than 100 S&P 500 companies prepare to report results and April payrolls data comes due May 8.
The earnings backdrop is the strongest argument for bulls. Analysts now expect S&P 500 profits to grow 27.8 percent in the first quarter, the fastest pace since the fourth quarter of 2021, after major technology companies lifted expectations, according to LSEG IBES data cited by Reuters.
That gives investors a clear May checklist: earnings growth must broaden beyond megacap technology, labor data must avoid signaling a sharper slowdown, and bond yields must remain contained. The payrolls report is expected to show 60,000 jobs added in April, down from 178,000 in March, according to economists polled by Reuters.
Fed policy keeps pressure on the rally
The Federal Reserve remains another obstacle. The central bank kept its target range for the federal funds rate at 3.5 percent to 3.75 percent at its April meeting and said it would assess incoming data, inflation pressures and the balance of risks before making further adjustments, according to the Federal Reserve’s April 29 policy statement.
The vote also showed a divided Fed. One policymaker favored a quarter-point cut, while three supported holding rates steady but objected to language that suggested an easing bias. That split matters for stocks because the S&P 500’s rally has pushed valuations higher just as investors are rethinking how soon rate cuts can arrive.
‘Sell in May’ fear fades, but history still matters
The seasonal warning has not disappeared, but its power has weakened. A 2026 review by Money noted that the May-to-October period has historically been the weakest six-month stretch for the S&P 500, averaging a 2.1 percent gain since 1950, while the average return over the past 12 years improved to 5.1 percent, according to Money’s analysis of the old investing adage.
The debate has been building for years. In May 2022, the S&P 500 was flirting with bear-market territory as inflation, a hawkish Fed and growth worries drove a brutal selloff, a reminder that seasonal caution can feel persuasive when macro stress is rising, according to a Reuters report from that market slide.
But later years complicated the story. A 2024 review from North Berkeley Wealth noted that the S&P 500 rose 4.8 percent that May, its strongest May performance since 2009, showing how quickly seasonality can be overwhelmed by broader market forces, according to the firm’s historical review.
A 2025 Fisher Investments commentary made a similar point, arguing that while May-to-October returns are often weaker than November-to-April returns, the period has still been positive most of the time, making a calendar-based exit risky for long-term investors, according to that prior analysis.
What would keep the S&P 500 rally alive?
The S&P 500 does not need May seasonality to turn bullish. It needs evidence that April’s rebound was built on durable earnings rather than short-term relief. Strong results from companies outside the biggest technology names would support that case, especially if consumer, industrial and financial companies show that demand remains intact.
Investors will also watch oil prices and Treasury yields. A sustained rise in energy costs could revive inflation fears, while higher yields would make stock valuations harder to defend. That combination would make May less about an old Wall Street phrase and more about whether profits can absorb a tougher policy and macro backdrop.
For now, the “Sell in May” fear is fading because the market’s evidence has improved. The S&P 500 has momentum, earnings expectations are rising and record highs have restored confidence. May’s test is whether that confidence can survive slower jobs growth, a cautious Fed and any renewed shock from oil or geopolitics.
