Following a strong start to the year and a brief setback in April, the stock market returned to form in May, with the S&P 500 returning almost 5 percent last month. Overall, the index returned 11.3 percent in the first five months of 2024, bringing the 12-month return of the index to 28.2 percent.
Like last year's rally, the index's latest strength was largely fueled by the excitement surrounding artificial intelligence, as chipmaker Nvidia and Microsoft, a key investor in OpenAI, were the biggest contributors to the S&P 500's overall gains. The former, fueled by strong earnings reports and the announcement of a 10-to-1 stock split, single-handedly carried the market through the first months of 2024, accounting for 32 percent of the S&P 500's total year-to-date return.
According to Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, Nvidia's 121-percent return through May 31, contributed 3.65 percentage points to the S&P 500's overall return, putting it miles ahead of Microsoft, Meta and Amazon, who each contributed 0.78, 0.66 and 0.58 percentage points to the index' year-to-date return, respectively. At the other end of the scale, Tesla dragged the index down 0.52 percentage points, as the company struggles with a slowdown in demand for electric vehicles, growing competition from China and the controversies surrounding Elon Musk, which are reportedly having a negative effect on Tesla's reputation.
