Good morning, investors. It doesn’t feel like it, but the S&P 500 has gained almost 28% over the last 12 months, geopolitical uncertainty and all.

That’s almost triple the average annual return of about 10%.

As impressive as that is, our team’s Best Ideas Club has returned 43% in the same stretch. Join today to unlock our full portfolio.

Now let’s get to the news.

A red-hot S&P 500 doesn’t squash the “sell in May” cliche that follows markets every year.

May is the fourth-weakest month of the year historically, and it also kicks off a stretch of seasonality so middling that it’s earned itself a moniker.

Dating back to 1945, the S&P 500 averages just a 2% gain from May to October, compared to a 7% return from November to April.

Yet recent years have pushed back on history.

In nine of the past 10 years stocks have gained during this stretch, and 2025 brought the strongest “sell in May” cycle on record, according to Ryan Detrick, chief market strategist for Carson.

What’s more, the strong start to 2026 gives reason to doubt a sudden reversal in momentum.

As Opening Bell Daily has documented, stocks continue to smash records despite the Iran conflict, elevated oil prices, rising inflation fears and a changing of the guard at the Federal Reserve.

In a recent note, Detrick highlighted that the S&P 500 has been: 

Earnings, too, have beat expectations across the board. 

While geopolitical noise can move stock prices day to day, earnings always drive stock prices in the long run. 

Indeed, FactSet data shows S&P 500 companies are on track to post a net profit margin of 13.4% for the first quarter, which would be the highest mark on record.

Plus, consensus expectations see that number rising for the next quarter. 

There’s a simple equation at play. Record earnings beget record stock prices. The former justifies the latter, and this calculus is the best argument against chatter of an AI bubble.  

Keep in mind that just last week Fed Chair Jerome Powell once again spoke of the resilience of the economy and labor market. 

Despite the bearish axiom that will make its rounds across the media this month, the evidence points to more reasons to stay in May than sell. 

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🏦 Berkshire Hathaway's cash pile hit a record $397 billion in Greg Abel's first quarter as CEO. Operating profit jumped 18% to $11.35 billion, but Abel was a net seller of stocks again in Q1 and authorized Berkshire's first share buyback since May 2024. (Yahoo Finance)

📈US crude oil exports are at a record high. Kpler data showed they hit 5.2 million barrels a day in April. Buyers in Asia and elsewhere are seeking US crude as an alternative to Middle East supplies. (CNBC)

🚢 A US-Iran peace deal still hasn’t materialized. President Trump hinted Sunday that the latest peace proposal isn’t sufficient. Iran’s suggestions included a one-month deadline on talks for a deal to reopen the Strait of Hormuz and end the naval blockade. (Bloomberg)

🗓 May 4, 1893: National Cordage Company, the most-traded stock on the New York Stock Exchange at the time, declared bankruptcy after a failed attempt to corner the hemp market. The collapse triggered the Panic of 1893, the worst US economic crisis until 1929.

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