AI surge lifts S&P 500; only XLK, XLY and XLV up in May

The S&P 500 rose 5.1% in May as heavy buying of technology stocks tied to artificial intelligence lifted the index, while most sectors finished the month lower. Only three SPDR sector ETFs closed May in positive territory: the Technology Select Sector (XLK), Consumer Discretionary Select Sector (XLY) and Health Care Select Sector (XLV).

Information technology led all sectors with a roughly 15.9% gain in May. Eight of the index’s 11 sectors ended the month down; Energy fell about 6.1% and Utilities declined about 5.5%, according to market data.

Semiconductor-related names and AI infrastructure suppliers saw some of the largest moves. The iShares Semiconductor ETF rose about 23% in May. Individual chipmakers and suppliers recorded large monthly advances, with Micron up about 87.8% and Advanced Micro Devices adding 45.6% for the month and reporting sizable year-to-date gains.

Several major technology companies posted outsized returns. Dell Technologies more than doubled, rising 101.4% in May after a strong quarter. Datadog gained about 87%, ServiceNow rose roughly 40.8% and Cisco added about 31.6% for the month. Cybersecurity firms also climbed sharply, with CrowdStrike up about 68.8%, Fortinet about 63.6% and Palo Alto Networks about 57.1%.

Health care modestly outperformed other sectors among the gainers. XLV returned about 2.3% for May, helped by Humana, which surged around 37.4% after reporting first-quarter adjusted earnings per share of $10.31 and reaffirming full-year adjusted EPS guidance of at least $9.00. Dialysis provider DaVita and lab-equipment maker Waters each rose more than 20%.

Consumer discretionary finished the month with a small gain. XLY rose about 2.6% in May, led by automaker and travel-related stocks: Ford climbed about 35.9% and MGM Resorts rose roughly 25.6%. Retail and auto-supplier names such as Best Buy and Aptiv also posted double-digit monthly gains.

Market participants attributed the sector performance to concentrated demand for companies that supply AI compute, data-center hardware and enterprise software. That concentration lifted the headline S&P 500 return while most sectors posted declines across the month.