As we move into May, one of the most familiar phrases in investing tends to resurface: “Sell in May and go away.” This year, that saying may not apply. While headlines remain filled with geopolitical tension and economic uncertainties, the market itself continues to show a notable degree of resilience. Here’s what the Carnegie Investment Team is honing in on for the month.
There is no shortage of global developments competing for investors’ attention, from conflict in the Middle East to ongoing concerns around energy supply and broader geopolitical uncertainty.
Historically, these events tend to create short bursts of volatility rather than prolonged market dislocations. Over the past decade, episodes like Crimea, Brexit, and regional banking stress have followed a similar pattern: an initial drawdown, followed by stabilization as markets begin to anticipate some form of resolution.
What’s different today is how quickly markets appear to be looking past unresolved risks. Equity markets have remained firm despite a lack of clear outcomes, suggesting investors are pricing in eventual normalization before it fully materializes. That confidence may ultimately prove justified, but it does leave less margin for error if conditions evolve differently.
In contrast to these concerns, corporate earnings remain a source of strength.
In April, companies have largely exceeded expectations, continuing a trend of conservative guidance followed by stronger-than-expected results. Importantly, earnings estimates have not been meaningfully revised downward despite higher input costs, and in many cases are moving higher.
That said, leadership remains concentrated. A significant portion of earnings growth continues to be driven by a relatively small group of companies, particularly within technology. While this dynamic has supported index-level performance, it also reinforces the importance of diversification beneath the surface.
Private credit has been an area of increased focus for investors.
Recent commentary from large institutions such as BlackRock and Goldman Sachs suggests that some of the more pressing concerns may be overstated. Rising yields in private credit have attracted demand, helping to alleviate fears around liquidity.
At the same time, large banks have disclosed relatively modest exposure to these areas when viewed in the context of their overall balance sheets. This indicates that even in a more stressed scenario, risks may be more contained than initially feared.
While this remains an area to monitor, the current trend points more toward normalization than systemic stress.
A new savings vehicle, “Trump Accounts” will become available starting July 4, 2026, offering families another way to invest for a child’s long-term future.
Contributions are capped at $5,000 annually (beginning in 2026), grow tax deferred, and must be invested in low-cost, index-based funds focused on U.S. equities.
Unlike Roth IRAs for children, these accounts do not require earned income to contribute, and they do not limit a child’s ability to fund an IRA separately.
While potentially a useful planning tool, they should be considered alongside more established options like 529 plans, custodial accounts, and Roth IRAs, depending on each family’s broader financial goals.
Beneath the surface, the consumer is beginning to show signs of strain.
Research shows that higher tax refunds have helped offset higher gasoline costs so far. The refund tailwind could diminish if these prices last through the summer months. These increases don’t exist in isolation; they tend to ripple through the broader economy, affecting transportation costs, goods, and services.
Taken together, these factors suggest a more constrained consumer backdrop, which could translate into slower spending and modest pressure on economic growth as the year progresses.
May presents a mix of competing forces. Geopolitical uncertainty and consumer pressures introduce real risks, while strong earnings and stable credit markets provide meaningful support.
Markets rarely have perfect vision. They move ahead of it. Today’s environment appears to be no different.
Our focus remains on balancing opportunity with risk, staying disciplined through short-term noise, and keeping portfolios aligned with long-term objectives.
This commentary is for informational purposes only and includes general economic and market conditions. Forward-looking statements cannot be guaranteed. Past performance is not a guarantee of future results. Data and other market and economic information referenced is from sources believed to be reliable and opinions are subject to change. All investments involve risks, including the loss of principal.
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