Investors may face turbulent times after a stellar earnings season and the recent rally in stocks. According to Evercore ISI, the first-quarter earnings season saw significant growth, with 98% of companies reporting a beat on expectations. The S&P 500 rose nearly 6.2% in May, its best month since November 2023.
Despite uncertainty over President Donald Trump’s proposed tax bill, history suggests that investors may experience increased volatility in June. Data from the CBOE Volatility Index shows that after huge earnings-fueled rallies, the VIX has gained an average of 19% in the following month. However, Evercore ISI’s Julian Emanuel believes that investors shouldn’t worry about revisiting market lows.
“We think there’s going to be further runway,” Emanuel said. “But we don’t think there’s going to be a recession.” He believes that the policy will evolve as markets move lower, but it won’t lead to a full-blown economic downturn. Instead, investors can expect a healthier period with more clarity around policy.
Source: https://www.cnbc.com/2025/06/02/stocks-had-big-earnings-season-rally-history-shows-june-could-be-rough.html