Major Asset Classes: May 2025 Performance Review

US stocks experienced a significant rebound in May, marking the first monthly gain since January, with the Vanguard US Total Stock Market Index Fund (VTI) rallying 6.3% and leading a broad rally in global assets. Despite this recovery, stocks in developed markets ex-US continue to lead year-to-date performance, rising nearly 17% in 2025.

Analysis

US equity markets demonstrated a significant recovery in May, marking the first monthly gain since January and positioning American shares at the top of major asset class performance for the month. The Vanguard US Total Stock Market Index Fund (VTI) exemplified this rebound, rallying 6.3% and leading a widespread upturn in global assets. This positive market movement is underscored by a 'strongly positive' sentiment score of 0.75 and an 'optimistic' tone, with a moderate market impact score of 0.6. Despite this robust monthly performance in the US, stocks in developed markets ex-US have maintained their lead on a year-to-date basis for 2025, appreciating by nearly 17%. This highlights a distinction between recent short-term momentum in US equities and sustained year-to-date strength in international developed markets, suggesting investors are navigating a varied global investment landscape.

Key Decisions for Investors

• Investors should evaluate the durability of the US stock market's May rebound, being the first positive month since January, by monitoring follow-through strength and upcoming economic data before committing to significant new allocations.