Traders Brace for S&P 500 Momentum Reversal After Stellar Rally

A frenzied May rally has equity analysts bracing for an end to the run in what has historically been one of the weakest months for S&P 500 Index returns.

The prospect of renewed trade-war concerns, uncertainty over the path of Federal Reserve policy and quarter-end portfolio rebalancing all risk rattling the market after the S&P 500 soared 6.2% this month through Thursday, putting it on track for the biggest May gain since 1990. The blistering rally, propelled by a reprieve from President Donald Trump’s tariff offensive, has left the benchmark within 4% of its February record.

“Traders have become too ...