May Market Commentary

May Market Commentary by Laurium, the sub-investment manager to the Thornbridge Global Opportunities Fund

This month’s market commentary has been produced by Laurium, the sub-invstment manager to the Thornbridge Global Opportunities Fund. It looks at the recovery of equity markets, positive returns in Europe and an uncertain geopolitical backdrop.

May 2025 continued the robust recovery in global equity markets, with major indices rebounding strongly from the lows made during April’s Liberation Day volatility. US markets came back into favour and the S&P 500 returned 6.2%, nearing its all-time high, while the Nasdaq led index gains with a 9.1% increase, driven by strong performances from tech stocks including Microsoft and Nvidia following solid earnings reports. The equity rally occurred despite rising bond yields, as investors regained their optimism about a fairly resilient economic outlook despite the uncertainty regarding trade policy and geopolitics.

European markets also delivered positive returns amid ongoing defence spending and some returning industrial optimism. Fund performance in this period was again strong, with outperformance from GE Vernova, Broadcom, Quanta Services and Microsoft being most noteworthy. Detractors from returns included United Healthcare (again, following further allegations of improper claims handling practices) and Fiserv (weak growth reported in their merchant solutions business Clover).

Looking ahead, stock market valuations have again returned to elevated levels in comparison with historic pricing. This is despite an uncertain investment backdrop as geopolitical and trade tensions persist, and central banks’ monetary policy is being set cautiously given limited policy direction from current labour and consumer market data. The Federal Reserve FOMC has room to move interest rates lower should economic weakness appear, but their commentary seems to indicate a reluctance to move too quickly, balancing slowing economic growth against possible tariff-induced inflation concerns.

– Laurium