Falling oil prices pushed major stock indexes to new highs, with Brent crude dropping 19% in May. That marks the steepest monthly decline for the global benchmark since 2020.
The slide in energy costs eased inflation concerns, giving investors confidence to buy stocks. Lower oil prices reduce input costs for businesses and leave consumers with more spending money.
The S&P 500 and Nasdaq composite both closed at record levels during the session. The Dow Jones Industrial Average also climbed, adding to its recent gains.
Brent crude settled near $77 a barrel after the monthly plunge. Analysts attributed the drop to weaker demand expectations and increased supply from major producers.
Energy sector stocks suffered as a result, dragging on the broader market. Several oil and gas companies reported double-digit percentage losses for the month.
The rally in equities broadened beyond tech stocks, with financial and industrial shares joining the advance. This shift signaled growing optimism about the economic outlook.
Traders now watch for further moves in oil prices as OPEC+ meets to discuss production targets. Any changes could shift the market dynamics again.
Despite the oil slump, some analysts warned that geopolitical risks might quickly reverse the trend. Supply disruptions remain a concern for global energy markets.
