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The S&P 500 jumped 4.3% in May, marking its best month since February. The broad market index topped the 5,300 milestone for the first time during the month, underscoring strong confidence. Solid corporate earnings, the Fed’s rate cut bets and the ongoing AI boom drove the stocks higher.
Earnings grew 6% in the first quarter of 2024, the highest growth rate seen in nearly two years. NVIDIA’s blockbuster earnings spread huge optimism in the stock market in recent weeks, along with the global AI boom (read: NVIDIA's Explosive Earnings: Should You Buy the Stock or ETFs Now?).
The latest bouts of data showed that the U.S. economy is back on course for another solid GDP gain in the second quarter. U.S. business activity growth accelerated sharply to its fastest pace in more than two years in May after two months of slower growth, led by an upturn in the service sector. Consumer confidence, as indicated by the Conference Board’s gauge of sentiment, increased in May after three months of decline.
Further, Wall Street has gotten more bullish on stocks, given the improving outlook for both earnings and economic growth. Over the past two weeks, three equity strategists tracked by Yahoo Finance have boosted their year-end targets for the S&P 500. The median target on Wall Street for the benchmark index now sits at 5,250, up from the median target of 4,850 on Dec 30, per Bloomberg data.
Let’s take a closer look at the fundamentals of SPY.
SPY in Focus
SPDR S&P 500 ETF Trust holds 503 stocks in its basket, with each accounting for no more than 7% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, financials, healthcare and consumer discretionary accounting for a double-digit allocation each.
SPDR S&P 500 ETF Trust has an AUM of $529.5 billion and charges 9 bps in fees per year. It trades in an average daily volume of 55 million shares and has a Zacks ETF Rank #2 with a Medium risk outlook (see: all the Large Cap Blend ETFs here).
Below, we have highlighted the abovementioned five best-performing stocks in the ETF.
Best-Performing Stocks of SPY
Gen Digital is one of the leading providers of cyber security solutions. The company is known for some of the popular brands in security and utilities, including Norton Anti-Virus, Norton Internet Security and Norton System Works. The stock soared about 24% last month and accounts for a 0.03% share in the SPY portfolio.
Gen Digital has an estimated earnings growth rate of 14.3% for the fiscal year (ending March 2025) and a Zacks Rank #2. It has a Growth Score of B.
Nvidia is the worldwide leader in visual computing technologies and the inventor of graphic processing unit or GPU. The stock jumped 23.5% in May. It has an estimated growth of 107.1% for the fiscal year (ending January 2025).
Nvidia makes up 6.2% of the assets in SPY and currently has a Zacks Rank #1. It has a Growth Score of A.
Vistra Energy is an energy company that offers electricity and power generation, distribution and transmission solutions. The stock jumped 21.6% last month. It makes up 0.08% of the assets in the SPY portfolio.
NetApp provides enterprise storage as well as data management software and hardware products and services. The stock rose 15% in May and has an estimated earnings growth of 3.7% for the fiscal year (ending April 2025).
NetApp accounts for 0.05% of SPY's assets. It currently has a Zacks Rank #2 and a Momentum Score of A.
Bath & Body Works is a specialty retailer and home to America's Favorite Fragrances, offering exclusive fragrances for the body and home, fragrance mist, body lotion and body cream, 3-wick candles, home fragrance diffusers and liquid hand soap. The stock gained 13% in May and accounts for a 0.03% share in the SPY portfolio.
Bath & Body Works has an estimated earnings growth rate of 1.8% for the fiscal year (ending January 2025) and a Zacks Rank #2 at present. It has a Growth Score of A.
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5 Top Best Performing S&P 500 ETF Stocks of May
The S&P 500 jumped 4.3% in May, marking its best month since February. The broad market index topped the 5,300 milestone for the first time during the month, underscoring strong confidence. Solid corporate earnings, the Fed’s rate cut bets and the ongoing AI boom drove the stocks higher.
SPDR S&P 500 ETF Trust (SPY - Free Report) , the proxy version of the S&P 500 Index, gained 2.5% in May. While many stocks powered the ETF, we have highlighted five that gained in double-digits and have a solid Zacks Rank #1 (Strong Buy) or #2 (Buy). These are Gen Digital Inc. (GEN - Free Report) , Nvidia Corporation (NVDA - Free Report) , Vistra Energy Corp. (VST - Free Report) , NetApp (NTAP - Free Report) and Bath & Body Works (BBWI - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings grew 6% in the first quarter of 2024, the highest growth rate seen in nearly two years. NVIDIA’s blockbuster earnings spread huge optimism in the stock market in recent weeks, along with the global AI boom (read: NVIDIA's Explosive Earnings: Should You Buy the Stock or ETFs Now?).
The latest bouts of data showed that the U.S. economy is back on course for another solid GDP gain in the second quarter. U.S. business activity growth accelerated sharply to its fastest pace in more than two years in May after two months of slower growth, led by an upturn in the service sector. Consumer confidence, as indicated by the Conference Board’s gauge of sentiment, increased in May after three months of decline.
Further, Wall Street has gotten more bullish on stocks, given the improving outlook for both earnings and economic growth. Over the past two weeks, three equity strategists tracked by Yahoo Finance have boosted their year-end targets for the S&P 500. The median target on Wall Street for the benchmark index now sits at 5,250, up from the median target of 4,850 on Dec 30, per Bloomberg data.
Let’s take a closer look at the fundamentals of SPY.
SPY in Focus
SPDR S&P 500 ETF Trust holds 503 stocks in its basket, with each accounting for no more than 7% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, financials, healthcare and consumer discretionary accounting for a double-digit allocation each.
SPDR S&P 500 ETF Trust has an AUM of $529.5 billion and charges 9 bps in fees per year. It trades in an average daily volume of 55 million shares and has a Zacks ETF Rank #2 with a Medium risk outlook (see: all the Large Cap Blend ETFs here).
Below, we have highlighted the abovementioned five best-performing stocks in the ETF.
Best-Performing Stocks of SPY
Gen Digital is one of the leading providers of cyber security solutions. The company is known for some of the popular brands in security and utilities, including Norton Anti-Virus, Norton Internet Security and Norton System Works. The stock soared about 24% last month and accounts for a 0.03% share in the SPY portfolio.
Gen Digital has an estimated earnings growth rate of 14.3% for the fiscal year (ending March 2025) and a Zacks Rank #2. It has a Growth Score of B.
Nvidia is the worldwide leader in visual computing technologies and the inventor of graphic processing unit or GPU. The stock jumped 23.5% in May. It has an estimated growth of 107.1% for the fiscal year (ending January 2025).
Nvidia makes up 6.2% of the assets in SPY and currently has a Zacks Rank #1. It has a Growth Score of A.
Vistra Energy is an energy company that offers electricity and power generation, distribution and transmission solutions. The stock jumped 21.6% last month. It makes up 0.08% of the assets in the SPY portfolio.
Vistra Energy has an expected earnings growth rate of 5.8% for this year and a Zacks Rank #2. It has a Growth Score of A (read: 5 Sector ETFs With Double-Digit Gains in May).
NetApp provides enterprise storage as well as data management software and hardware products and services. The stock rose 15% in May and has an estimated earnings growth of 3.7% for the fiscal year (ending April 2025).
NetApp accounts for 0.05% of SPY's assets. It currently has a Zacks Rank #2 and a Momentum Score of A.
Bath & Body Works is a specialty retailer and home to America's Favorite Fragrances, offering exclusive fragrances for the body and home, fragrance mist, body lotion and body cream, 3-wick candles, home fragrance diffusers and liquid hand soap. The stock gained 13% in May and accounts for a 0.03% share in the SPY portfolio.
Bath & Body Works has an estimated earnings growth rate of 1.8% for the fiscal year (ending January 2025) and a Zacks Rank #2 at present. It has a Growth Score of A.