The S&P 500 wrapped up the worst quarter since the third quarter of 2022, plunging 4.6%, due to escalating trade tensions and concerns over stagflation.
The Trump administration imposed tariffs on Canada, Mexico, China, and other countries, escalating trade war concerns. Markets are on edge ahead of Trump’s anticipated Wednesday announcement of sweeping new tariffs, dubbed “Liberation Day” by the President. The administration has hinted at tariffs on all nations, compounding fears of inflation and slowing growth.
These tariffs are expected to drive up consumer prices, thus curbing spending and weighing on the U.S. economy.
Technology Bears the Brunt
The technology sector, which drove the stock markets higher through 2023 and 2024, weighed heavily on U.S. equity markets. In particular, the “Magnificent Seven” lost more than $2 trillion in market value collectively since the start of the year as investors sold off growth names. Tesla's (TSLA) stock plummeted 39%, marking its worst first-quarter performance ever, while other major tech companies, including Apple (AAPL), Microsoft (MSFT) and NVIDIA (NVDA), also experienced significant declines ranging from 13% to 22% (read: Can the Tide Turn for 'Magnificent Seven' Stocks? ETFs in Focus).
Energy Sector Emerges Stronger
Despite the overall market downturn, the energy sector emerged as a winner, with the S&P 500 Energy Sector Index climbing 9.3%. The gains were credited to rising oil prices and increased demand in the energy market. Investors' shift from tech toward companies with strong free cash flow, capable of paying dividends and withstanding economic downturns, benefited the energy sector.
Defensive Sector Gains Appeal
Defensive sectors like healthcare, consumer staples and utilities tend to be less sensitive to economic cycles and more resistant to market downturns. These generally act as a safe haven during political and economic turmoil. Stocks in these sectors generally provide higher returns in troubled times.
SPDR S&P 500 ETF Trust SPY, the proxy version of the S&P 500 Index, has lost 4.9% since the start of the year. Let’s take a closer look at the fundamentals of SPY and the stocks behind this rally.
SPY in Focus
SPDR S&P 500 ETF Trust holds 503 stocks in its basket, with each accounting for no more than 7% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, financials, healthcare and consumer discretionary accounting for a double-digit allocation each.
SPDR S&P 500 ETF Trust has an AUM of $587.4 billion and charges 9 bps in fees per year. It trades in an average daily volume of 47 million shares and has a Zacks ETF Rank #2 with a Medium risk outlook (see: all the Large Cap Blend ETFs here).
While many stocks in the ETF saw dismal performances, some have shown strong resilience, surging more than 20%. Below, we have highlighted the 10 best-performing stocks in the ETF of the last quarter.
Best-Performing Stocks of SPY
CVS Health CVS: Formerly known as CVS Caremark, CVS is a pharmacy innovation company with integrated offerings across the entire spectrum of pharmacy care. The stock has jumped 49.6% since the start of 2025 and has an estimated earnings growth rate of 8.7% for this year. CVS Health currently has a Zacks Rank #3 (Hold) and a Value Score of A.
Newmont Corporation NEM: This Zacks #3 Ranked company is one of the world's largest producers of gold, with several active mines in Nevada, Peru, Australia and Ghana. Though its earnings are expected to decline 8.6% this year, the stock has soared 29% in the first quarter. Newmont has a VGM Score of B (read: Best & Worst ETF Zones of Q1).
Philip Morris International PM: This Zacks #3 Ranked company is progressing well with its business transformation in the face of consumers' rising health consciousness and stern regulations to dissuade smoking. The stock has risen 29% and has an estimated earnings growth rate of 8.7% for this year. Philip Morris has a Growth Score of A.
AT&T Inc. T: This #3 Ranked company is the second-largest wireless service provider in North America and one of the world’s leading communications service carriers. Though its earnings are expected to decline 5.3% this year, the stock has gained about 24%. AT&T has a Value Score of B.
Cencora Inc. COR: This Zacks Rank #2 (Buy) company is one of the world’s largest pharmaceutical services companies, focusing on providing drug distribution and related services to reduce healthcare costs and improve patient outcomes. The stock has climbed 22.5% and has an estimated earnings growth of 11.6% for the fiscal year (ending September 2025). Cencora has a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vertex Pharmaceuticals Incorporated VRTX: This Zacks #3 Ranked company is focused on the discovery, development, and commercialization of small-molecule drugs targeting serious diseases. The stock has jumped 22.5% since the start of 2025 and has an estimated earnings growth of more than 1000% for this year.
Consolidated Edison Inc. ED: Also known as ConEd, this Zacks #3 Ranked company is a diversified utility holding company with subsidiaries engaged in both regulated and unregulated businesses. The stock has risen 22% and has an estimated earnings growth of 4.4% for this year.
W.R. Berkley Corp. WRB: This Zacks #3 Ranked company is one of the nation’s largest commercial lines property casualty insurance providers. The company offers a variety of insurance services, ranging from reinsurance to workers' compensation and third-party administrators. The stock soared 21.8% in the first quarter and has an expected earnings growth rate of 4.1% for this year.
Welltower Inc. WELL: Formerly known as Health Care REIT, Welltower is a real estate investment trust (REIT) that is engaged in investments with senior housing operators, post-acute providers and health systems. The stock gained 21.7% in the first quarter and has an expected earnings growth rate of 14.1% for this year. Welltower has a Zacks Rank #2.
Gilead Sciences GILD: This Zacks Rank #2 company with a VGM Score of B is a pioneer in developing drugs for the treatment of human immunodeficiency virus. The stock has risen 21% and has an estimated earnings growth of 70.3% for this year.
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