Institutional investors made significant moves in the stock market in May, dumping a net $50.78 billion worth of stocks, as reported by market intelligence from S&P Global. This figure exceeded the net $30.93 billion worth of stocks that were sold off by institutions in April and also surpassed the net monthly average over the past year of $42.73 billion.
According to S&P Global, the reason behind this mass exodus of equities by institutions in May can be attributed to trade concerns and Moody’s decision to downgrade the United States’ credit rating from AAA to AA1. Thomas McNamara, a director of market intelligence at S&P Global, explained, “Institutions still don’t feel that we are out of the woods in relation to tariffs, recession, and overall global uncertainty.”
On the flip side, index and exchange-traded fund investors were actively acquiring stocks, with a net $11.07 billion purchased in May and $14.46 billion in April. Despite these positive numbers, both figures were significantly lower than the 12-month average of $29.44 billion. McNamara emphasized that stock sales are never a zero-sum game and highlighted share buybacks as a major driver behind the market rebound in May.
The S&P 500 saw a modest 0.25% increase over the past month, while the Nasdaq Composite experienced a more substantial gain of nearly 1.6%. In contrast, the Dow Jones Industrial Average dipped by almost 1.4%.
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(Source: S&P Global/X)
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