S&P 500 ETFs Hover Near Record Highs: 5 Stocks Aiding the Rally

The S&P 500 closed above 6,000 points on June 6, marking its first close above that level since February. As of June 12, the index stood at 6,045.26, somewhat below the all-time high reached earlier this year. The rally continues to push major indexes back toward record highs, following several weeks of pressure due to trade tensions. The SPDR S&P 500 ETF Trust SPY has gained about 3.3% year-to-date and is up 2.9% over the past month.

The U.S. stock market has rebounded in recent weeks as investor worries over Trump’s proposed tariffs have diminished, while corporate earnings and economic indicators have remained solid. Note that the S&P 500 recorded the strongest monthly performance in May since late 2023.

Why the Rally Could Prolong?

Consumer prices in the United States rose modestly in May, indicating that President Donald Trump’s tariffs have not yet had a significant impact on inflation. The Consumer Price Index (CPI) increased by just 0.1% in May, falling short of the 0.2% monthly increase forecasted by a Dow Jones survey, as quoted on CNBC.

This puts the annual inflation rate at 2.4%, matching economists’ expectations for the year. This kind of soft inflation data may help the Fed to cut rates in the near term and boost stocks (read: Sector ETFs Likely to Gain on May Inflation Data).

Talks aimed at easing tensions between the United States and China have concluded with what President Donald Trump described as a "deal." According to Trump, China has agreed to supply U.S. companies with magnets and rare earth metals—key materials in the technology and defense sectors. In return, the United States will withdraw its threats to revoke visas for Chinese students, a point of disagreement in recent months.

Small business owners grew more optimistic in May, reflecting improved expectations for business conditions and sales. The latest data revealed that the small business optimism index climbed to 98.8 in May, up from 95.8 in April. This marked the first rise since September (read: Small Business Optimism Grows: What's Ahead for ETFs?). 

Despite geopolitical uncertainty and macro headwinds, corporate America delivered better-than-expected first-quarter 2025 earnings. The tech sector, particularly, has shown robust revenue growth, fueled by AI adoption and cloud expansion.

Citi analysts lifted their year-end target for the S&P 500 to 6,300. “Renewed confidence in the AI-related opportunity" and "improved earnings growth expectations" headed into next year have been held responsible for the bullish revision in the price target. Several banks have recently boosted their own targets. Deutsche Bank also lately lifted its target to 6,550, as quoted on Yahoo Finance.

Stocks Leading the Rally

Against this backdrop, below we highlight a few stocks that drove the S&P 500 index.

Palantir Technologies PLTR – Up 80.0% YTD

Palantir Technologies builds and deploys software platforms for the intelligence community to help in counterterrorism investigations and operations across the United States and internationally. Palantir’s software is used in approximately 80 industries globally.

The stock hails from top-ranked industry (top 20%) and top-ranked sector (top 44%).

NRG Energy NRG – Up 62.8% YTD

The company is engaged in the production, sale and delivery of energy and energy products and services to residential, industrial as well as commercial consumers in major competitive power markets in the United States.  The stock comes from top-ranked industry (top 26%) and top-ranked sector (top 13%).

Howmet Aerospace HWM – Up 54.8% YTD

Howmet Aerospace Inc. provides engineered solutions for customers in the transportation and aerospace (both defense and commercial) industries. Notably, it offers forged wheels for commercial use in the transportation industry.

It also provides aerospace fastening systems, components used in jet engines and structural parts made of titanium used in defense and aerospace applications. The stock comes from top-ranked industry (top 29%) and top-ranked sector (top 6%).

Philip Morris International PM – Up 52.0% YTD

The tobacco giant has been expanding in the reduced risk products (RRPs) or smoke-free products category, evident from the success of IQOS (a heating tobacco device) that counts amongst one of the leading RRPs in the industry. The stock belongs to a top-ranked industry (top 11%).

GE Aerospace GE – Up 42.4% YTD

GE Aerospace (erstwhile General Electric Company) is a leading designer, developer and producer of jet engines, components and integrated systems for military, commercial and business aircraft.

The stock comes from top-ranked industry (top 29%) and top-ranked sector (top 6%).

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This article originally published on Zacks Investment Research (zacks.com).

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