May 2025 was marked by a broad resurgence in equities, led by the US. The S&P 500 recorded its best monthly performance since late 2023, supported by continued strength incorporate earnings and a broad-based sector rotation favoring cyclical and growth-oriented sectors such as technology, industrials, and consumer discretionary. European equities also performed well, rising around 4% for the month, largely fueled by cyclical sectors,a dovish signal from the ECB and signs of a rebound in industrial activity,responding positively to easing geopolitical tensions and the prospect of stronger export demand.
The bond market faced pressure from rising yields and shifting rate expectations, even as credit spreads narrowed. US Treasury yields climbed sharply, with the 10 -year note ending the month at 4.41%, up by 25 basis points from April, while the 30 -year yield mirrored this increase to close at 4.93%.
