Trump raises tariff demands in EU trade talks to 15-20% - FT
In a volatile year for stocks, as tariffs and other factors roil expectations and keep investors on edge, industrial stocks are the market darlings since the April rebound.
Using a set of ETF proxies, the Industrial Select Sector SPDR® Fund (NYSE:XLI) is holding on to the lead in 2025 by a solid margin, based on prices through yesterday’s close (July 16). The fund is up 14.9% year to date, well ahead of the rest of the field and the broad stock market.
XLI holds the likes of General Electric (NYSE:GE) (the fund’s largest holding with a 6.2% weight), Caterpillar (NYSE:CAT) and Boeing (NYSE:BA). XLI is beating the overall equities market by a hefty degree vis-à-vis the SPDR S&P 500 ETF (SPY), which is up a relatively modest 7.1% in 2025.
The industrials sector has been the market leader since the start of the rebound off the April lows. Part of the reasoning for the bullish sentiment may be the expectation that the White House policy to promote the reshoring of US industrial activity will benefit these companies.
Meantime, the weakest sectors remain consumer discretionary (XLY) and health care (XLV). In both cases, stocks in these sectors are posting modest year-to-date losses.
Betting against these out-of-favor sectors has paid off recently, but a contrarian bet is starting to look intriguing for consumer discretionary (XLY). The idea is tempting, in part because XLY, although still nursing a slight loss this year, is trending up and its 50-day moving average recently crossed above its 200-day counterpart – a possible signal that bullish sentiment is reviving in this corner.
Health care, by contrast, continues to suffer a negative trend. Its weak technical profile suggests that it’s still premature to bet on a rebound for this battered sector.