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Mid-May Market Calm Before the Storm?
Moody’s downgrade, seasonal sell signals, and what history says about the second half of May.
John Kiritsis
May 19, 2025
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Mid-May Recap: Strength Gives Way to Seasonal Caution
With the first half of May behind us, most of our seasonal trends have performed exceptionally well. The broader market has rebounded strongly from recent tariff-related volatility, showing resilience despite a shaky macroeconomic backdrop.
Looking ahead, the second half of May historically leans toward either a mild pullback or sideways movement, as noted in our May Biases and May Historical Briefings. That pattern may assert itself again—especially now that fresh concerns have emerged.
Notably, Moody’s has downgraded the U.S. credit rating from Aaa to Aa1, citing rising fiscal risks and unsustainable entitlement spending. While the market has largely shrugged this off for now, such downgrades can weigh on investor sentiment and put upward pressure on Treasury yields.
We’ll be closely watching to see whether the seasonal pattern holds—or if renewed fiscal and geopolitical uncertainty sparks a shift in market behavior.
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Current Seasonal Trends
Symbol | Trend History | Start Date | End Date | Average % (approximate) |
|---|---|---|---|---|
AMAT | Up 9 out of 10 past years | 4-28 | 6-05 | +8% |
AMD | Up 10 out of 10 past years | 5-04 | 6-10 | +13% |
NVDA | Up 9 out of 10 past years | 5-08 | 6-09 | +18% |
TSLA | Up 12 out of the past 14 years | 5-15 | 6-16 | +10% |
SOXL | Up 9 out of 10 past years | 5-20 | 6-23 | +13% |
X | Down 9 out of 10 past years | 4-24 | 5-26 | -11% |
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Historical Stock Market Forecast
May Historical Biases
Upside bias first half of May.
Downside bias in 2nd half of May.
Mid to late May can often be filled with long term swing trade entry opportunities that can last into the summer time.
May Historical Briefing
Earnings season. Typically, a 50/50 month. The 1st half of the month, stocks typically rise as we finish up earnings. The 2nd half of the month expect heavy profit taking.
Seasonal Briefing (May 1 - October 1)
Summertime season: In this season, movements can become shallow in either direction. Trade-able movements may become less frequent and we often see swing trades end closer to the 1-week mark than “good swing trades” of 1-3 weeks. There can be periods of flat during this period where no obvious trades are available.
Happy Trading,
Next Weeks Trends
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