Why Delta Air Lines Stock Flew in May
Delta Air Lines (NYSE: DAL) stock rose by 16.2% in May, according to data provided by S&P Global Market Intelligence. The move primarily results from the de-escalation of the tariff conflict, primarily between the U.S. and China in mid-May.
Airlines are good bellwethers of the economy. When travelers (consumers or corporate) are feeling confident in growth prospects, bookings are high, revenue passenger miles are in growth mode, and load factors (the percentage of seating capacity filled by paying passengers) are also high. The opposite applies when the economy turns down, or there's a fear of a downturn ahead.
Moreover, these responses to a changing environment tend to be relatively rapid; thus, when President Donald Trump initiated the current tariff dispute, it caused uncertainty among consumers and corporate travelers, leading Delta and other airlines to revise or withdraw their initial full-year guidance.
Source Fool.com
