The U.S. stock market has rebounded since the announcement of “liberation day” tariffs on April 2, with investors rotating into cyclical stocks from defensive equities. President Trump’s trade deal with the European Union and positive economic signs have boosted market confidence. The S&P 500 closed at record highs last week.

Healthcare remains a top investment opportunity as the market recovers, with Morgan Stanley Wealth Management favoring the sector. Healthcare has been the worst-performing S&P 500 sector in 2025, according to Bespoke Investment Group. Consumer discretionary was the only other sector in the red, while technology and non-tech sectors outperformed.

The S&P 500 has climbed 8.6% in 2025, led by Big Tech stocks. The market rally has broadened beyond tech, with various sectors outperforming. U.S. businesses are reporting quarterly earnings, with results from Meta Platforms, Microsoft, Amazon, and Apple scheduled. This week will be filled with earnings and economic data.

The Federal Reserve’s monetary policy meeting and the U.S. jobs report for July are key events this week. The stock market closed mostly higher on Monday, with the S&P 500 hitting a sixth straight record peak. The market has rebounded significantly since April, but caution is advised due to rich valuations. Investors should focus on stocks with earnings potential and policy beneficiaries.

Read more at Yahoo Finance: Where Morgan Stanley is looking for value after powerful rebound in U.S. stocks