What this chart shows
This week’s chart highlights the average six-month rolling returns for the S&P 500 since 1950, with a focus on the seasonal pattern behind the old market adage “Sell in May and go away”. The data suggests that equities have historically performed better in the six-month window from November to April than during the May to October period. While the May to October window has delivered a modest gain of just 1.8% on average, it’s still been positive around 65% of the time. In contrast, the November to April period has been far stronger – both in terms of average returns and consistency. The persistence of this trend across decades, despite changes in the economic backdrop, is part of what keeps the saying alive – and may even influence investor behaviour today.
Why this is important
Seasonal investing can sound like a thing of the past, but the data still shows a pattern. Explanations for the pattern range from summer holiday slowdowns and lower trading volumes or lower levels of liquidity, to earnings season dynamics and behavioural shifts. It’s hard to pinpoint a single root cause – and that ambiguity is exactly why the trend shouldn’t be followed blindly. Still, it offers a useful lens through which to understand shifting market sentiment, particularly at a time like now.
Equities got off to a strong start in January, but the pullbacks in recent months have been a clear reminder of how quickly momentum can fade. Renewed tariffs under President Trump have reintroduced fears of protectionism and investors are now weighing how these trade policies could impact inflation and complicate the path for interest rate cuts.
Still, seasonality is just one of many variables. While short-term moves can be shaped by headlines and political developments, markets are ultimately more influenced by the broader economic backdrop rather than the page on the calendar. While the “Sell in May” mantra may influence short-term narratives, the bigger truth remains: time in the market tends to beat timing the market and investors with a long-term mindset are usually the ones who benefit the most.
The week was marked by significant monetary policy actions, with both the Bank of England and the People's Bank of China implementing interest rate cuts to counteract economic pressures from ongoing trade tensions. These measures, alongside renewed US-China trade negotiations, influenced global markets, leading to shifts in investor strategies and market dynamics.
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The US economy contracted by 0.3% in Q1 2025, attributed to the effects of new tariffs and declining business sentiment.
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April saw US mergers and acquisitions activity halve, reaching the lowest level since May 2009, due to tariff-induced uncertainties.
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Despite bond sell-offs, investors redirected funds into equities, particularly in North America, with £1.5 billion flowing into equity funds amid speculation of potential tariff reversals.
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The US and China announced major cuts to tariffs on each other’s goods for 90 days. Washington will reduce levies to 30% from 145%, while Beijing will lower charges to 10% from 90% as they look to de-escalate the trade war.
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The UK secured a trade deal with the U.S., eliminating tariffs on UK steel, aluminium, and car exports, while easing tariffs on US ethanol and beef.
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The Bank of England reduced interest rates from 4.5% to 4.25% to support economic growth amid global uncertainties, as expected.
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BlackRock's CEO, Larry Fink, expressed renewed confidence in the UK market, highlighting increased capital allocation to UK assets.
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The UK's Financial Conduct Authority initiated consultations to simplify mortgage issuance and advisory rules, aiming to boost borrowing and enhance financial flexibility for consumers.
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European mergers and acquisitions rose by 19% in early 2025, totalling $1.2 trillion, driven by heightened interest in UK firms.
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Germany’s Friedrich Merz confirmed as chancellor in second vote following first round humiliation, the first time a second vote has been needed since 1949.
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While the UK secured a trade deal with the US, the EU continued to face challenges from US protectionist measures, affecting trade dynamics.
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Volodymyr Zelenskiy said he will be “waiting for” Vladimir Putin in Turkey on Thursday after Donald Trump insisted the two leaders meet despite Moscow’s reluctance to agree to a 30-day ceasefire. UK Foreign Secretary David Lammy is set to unveil new sanctions targeting Russia as he hosts a security meeting of European ministers.
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China's central bank cut the benchmark seven-day repo rate to 1.4% and reduced the reserve requirement ratio by 0.5 percentage points, injecting approximately RMB 1 trillion into the economy.
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President Xi Jinping visited Moscow, resulting in over 20 bilateral cooperation agreements with Russia, encompassing various sectors including investment protection and the digital economy.
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Thousands participated in May Day rallies in Tokyo, demanding higher wages, gender equality, and improved economic support for small businesses.
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Emerging markets faced mixed reactions, balancing the benefits of China's stimulus measures against the challenges posed by global trade tensions.
