QQQ ETF Just Saw Its Second-Best Month Of Inflows Ever: Here's Why

The Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), Wall Street's go-to tech fund, just recorded its second-largest monthly inflow on record, as investors chased an impressive rally in the Nasdaq 100 index powered by a trade war truce and Magnificent Seven dominance.

The QQQ ETF pulled in $7.2 billion of net inflows in May, according to TradingView’s fund flow data. That marks the second-largest monthly inflow in the ETF's 10-year history, only trailing November 2024's $9.2 billion surge that followed Donald Trump's presidential victory.

Fueled by a 9% rally in the Nasdaq 100 — its best month since November 2023 — the fund crossed $330 billion in assets under management, consolidating its position as the fifth-largest ETF globally.

What Sparked The Inflows?

The rally followed a breakthrough in U.S.-China trade relations. On May 11, both countries agreed to a 90-day trade truce, slashing average tariff rates by 115 percentage points.

U.S. tariffs on Chinese goods dropped from 145% to 30%, while Beijing reduced duties on American imports from 125% to 10%.

"The temporary deal puts greater pressure on the two countries to develop a mutually amicable agreement," LPL Financial chief economist Jeffrey Roach said in a recent note.

The deal provided immediate relief to export-heavy sectors — especially tech hardware, semiconductors and software services — and helped fuel the Nasdaq's broad-based rally.

Magnificent Seven’s Dominance Strengthens

The Magnificent Seven stocks played a central role in QQQ's surge, continuing the momentum from their historic $1.75 trillion of combined market-cap gain in May.

Nvidia Corp. (NASDAQ:NVDA) jumped 23.5%, becoming the second-best performing Nasdaq 100 stock in the month.

Tesla Inc. (NASDAQ:TSLA) gained 20.9%, while Meta Platforms Inc. (NASDAQ:META) and Microsoft Corp. (NYSE:MSFT) posted monthly gains of 19.4% and 16.5% respectively.

These megacap tech names are viewed by institutional investors as “defensive growth proxies”, according to Goldman Sachs' Ryan Hammond, citing their strong earnings and relevance in AI, cloud computing and enterprise infrastructure.

Roundhill Investments CEO David Mazza, whose firm manages the Roundhill Magnificent Seven ETF (NYSE:MAGS), said these companies "aren't speculative bets on future adoption," but rather, "staples within global consumers' lives."

Stock Name	Market Cap on April 30 (B$)	Market Cap on May 31 (B$)	Absolute Change (B$)	% Change in May
Apple	3,192.19	2,999.86	-192.33	-6.0%
Microsoft	2,937.79	3,421.65	+483.86	+16.5%
Nvidia	2,657.65	3,297.17	+639.52	+24.1%
Amazon	1,957.13	2,176.46	+219.33	+11.2%
Alphabet	1,938.41	2,090.08	+151.67	+7.8%
Meta Platforms	1,385.92	1,628.00	+242.08	+17.5%
Tesla	908.83	1,115.93	+207.10	+22.8%
Total	14,977.92	16,729.15	+1,751.23	+11.7%

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