The industrial sector leads U.S. equities in 2025, up 15% year-to-date. Second-quarter earnings season will test the sector’s strength. Aerospace and defense stocks have surged due to geopolitical tensions. GE Aerospace raised its 2025 profit forecast. GE Vernova is the best-performing industrial stock, up over 70%.

Momentum for industrials and the market will be tested with upcoming earnings reports from Alphabet and Tesla. Themes like reshoring infrastructure and AI are supporting stocks like Eaton and Rockwell Automation. Uber has also boosted the industrial sector this year. Large cap industrials still look attractive despite recent gains.

Declines in growth-cycle-linked stocks like UPS and FedEx have weighed on the industrial sector. Investors watch for trade developments ahead of higher U.S. tariffs on August 1. Fed Chair Jerome Powell faces pressure to lower interest rates. The S&P 500 has climbed 7% this year, showing resilience despite uncertainty. Stocks continue to trade well despite significant headwinds.

Read more at Yahoo Finance: Industrial sector’s gains to be tested as earnings ramp up