Some months, markets rise on strength. But at other times, they rise despite weakness. This is what happened last month, to the consternation of many investors. The S&P 500 climbed 6.3% in May, with U.S. stocks posting their strongest monthly gain since late 2023. Markets were led by a resurgence in large-cap technology stocks. Treasury yields also moved higher, reflecting both improved economic sentiment and the persistent overhang of fiscal instability. Bond markets absorbed a credit outlook downgrade from Moody’s, while inflation data gave the Fed some breathing room.

These gains occurred against a backdrop of rising global and domestic tensions, the news getting worse with each passing day. Why does the market seem so complacent? After a quick review of May market data, we’ll explore why markets don’t always reflect our mood, and offer tips on managing investments during times of volatility.

After a quarter marked by economic turbulence, policy whiplash, and market volatility, investors are wondering if things will settle down. Have we averted a major market shock, or are we simply in a holding pattern before the next disruption? The answer may very well be “yes” and “yes.” Our work over the past month has focused on cutting through the noise, reading the signals, and reaffirming what matters most for long-term investors.

April brought sharp swings across equity and bond markets. U.S. stocks stumbled early in the month but managed to stabilize. The S&P 500 finished slightly lower, while international markets—both developed and emerging—posted gains. Bond markets held up well, supported by falling yields and signs of cooling inflation. Still, the economic data showed a mixed picture. A 41% surge in imports ahead of tariff changes dragged first-quarter GDP slightly negative. Consumer and business spending remained healthy, even as government spending fell. Technology stocks rallied, while energy lagged by a wide margin. Treasuries extended their winning streak, posting gains for the fourth consecutive month.

In the first week of April, markets were thrown into chaos as President Trump's tariff announcements reverberated through global financial markets. Stocks tumbled, the dollar fell, and even the world’s safest assets—gold and U.S. Treasury bonds—were hard hit. Investors were incredulous as Trump’s “Liberation Day” charts revealed steep worldwide tariffs on friends, foes, and uninhabited islands with equal disregard for consequences. This felt like a game of bluff. Except Trump insisted he wouldn’t fold.

For a few days it felt like the financial world was teetering and might even collapse, even as White House advisors hinted that a grand strategy would soon be revealed. Maybe so, but there was apparently no forethought given to the market’s extremely volatile and negative reaction. Within a few days, Trump did an about-face and announced a 90-day pause on the new tariffs. (Except for China, where tariffs would be even more punitive.) Markets rallied, with investors hoping the worst was over.

Markets are at an inflection point, caught between economic resilience and deep uncertainty. Volatility has surged, policy shifts are sending mixed signals, and geopolitical realignments are reshaping the global landscape. With Trump’s second term in motion, tariffs, tax cuts, and executive power moves are creating both risk and opportunity.

What does it all mean for investors? This piece dives into the forces driving today’s market turbulence—what’s noise, what’s structural, and how to stay strategically positioned. Plus, a look at February’s market trends and what’s ahead.

The investment landscape is undergoing seismic shifts as the new administration moves at breakneck speed to reshape economic, political, and institutional norms. Policy changes and hundreds of executive orders have heightened uncertainty, prompting investors to rapidly assess risks and opportunities in an environment that changes every day.

A significant expansion of executive power is at the center of debate. As described by the New York Times (9-February 2025), Trump’s policies are not only reshaping trade and regulatory frameworks but challenging long-standing constitutional norms, which could have lasting and far-reaching economic impacts. While supporters applaud an overhaul of inefficient government systems, critics warn of destabilized legal and financial frameworks upon which investors have long relied. Let’s look at some recent actions and the concerns they raise.

The conversation about Bitcoin has taken a dramatic turn, with the Trump administration’s proposed Federal Bitcoin stockpile adding an intriguing—and contentious—dimension to its role in global finance. This initiative raises questions about Bitcoin’s practical and strategic value, and how it could affect investors at all levels.

Bitcoin’s meteoric ascent underscores its growing prominence in global finance. With a 143% gain in 2023, followed by a 121% surge in 2024, it has become impossible to ignore.