US investor pessimism enters 4th straight month in May

Risk-averse sentiment among US equity investors persisted for a fourth straight month, according to the monthly S&P Global Investment Manager Index US equity investor sentiment survey results released May 13.

The survey's Risk Appetite Index moved up to negative 19% in May from negative 31% in April, indicating ongoing risk aversion in equity markets, albeit to a lesser degree than in April. The index measures net risk appetite among surveyed investors, with those reporting a high tolerance or aversion counting with double weight.

The survey has yielded negative index results since February and registered its second-lowest reading in the survey's history in March at negative 32%. Though still in negative territory, the May index score is the highest since January.

April's index score was aggregated from survey data received early in the month as markets anticipated and subsequently nosedived in response to US President Donald Trump's April 2 reciprocal tariff announcement. May's survey data collected between May 6 and May 8 accounts for market relief following Trump's mid-April decision to delay the reciprocal tariffs and signals that the US would pursue trade negotiations with multiple international governments. The US has since confirmed trade deals with the UK on May 8 and with China on May 11.

Political, macroeconomic factors seen weighing on returns

Investors largely continue to expect net market losses in the coming month.

The survey's Equity Returns Index registered a reading of negative 29%, up from negative 35% in April. The score reflects the percentage of surveyed respondents expecting an improvement in equity returns over the 30 days following the end of the survey minus the percentage of those expecting a deterioration. Like the Risk Appetite Index, the current score indicates ongoing bearishness, but to a lesser degree than any of the previous three months.

Among eight market-influencing factors, surveyed respondents indicated that the political and US macroeconomic environments were most likely to pressure market returns. Their respective index readings of negative 71% and negative 62% were both lower than their prior three-month averages.

Sentiment toward central bank policy sank the most from April to May, with the index score flipping from positive territory in April to negative 5% this month after a 10-percentage-point drop.

S&P Global's Investment Manager Index survey includes monthly responses from a panel of just under 300 participants employed by firms that collectively represent approximately $3.500 trillion in assets under management. Data was collected May 6–8. If you would like to receive the full report on a regular basis or participate as a panel member, please email economics@spglobal.com.

"While economic worries stem mainly from the tariff impact, worries persist over fiscal policy, in terms of spending limits and DOGE-related cuts, as well as monetary policy, with investors seeing Fed policy as a drag on equities as the scope for lower interest rates is constrained by fears of higher inflation," Chris Williamson, executive director at S&P Global Market Intelligence, said in a report released alongside the survey results.

Only shareholder returns were perceived to be a contributing factor for positive market returns in May.

Sentiment reversals for IT, energy

Perception drastically changed in May toward the information technology and energy sectors.

Investors signaled a major bearish turn for energy equities as the sector's index score fell 53 percentage points from April to negative 46% in May. Meanwhile, a bullish attitude returned to the IT sector with its index score climbing back into positive territory at 6% from negative 35% in April.

Overall, investors signaled optimism in only four of the 11 equity sectors tracked by the survey. The utilities sector, considered to be a defensive market segment, had the highest index score at 24%.

Investors continued to be most risk-averse toward the consumer discretionary sector.