The S&P 500 had the best first week of a presidency since Ronald Reagan assumed power in 1985. The index gained about 2% last week on President Donald Trump’s economic growth policies, advancements in AI and a solid start to the corporate earnings season.
SPDR S&P 500 ETF Trust SPY, the proxy version of the S&P 500 Index, gained 3.1%. While many stocks powered the ETF, we have highlighted five that led the way higher last week and have a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold). These are Moderna Inc. MRNA, Oracle Corporation ORCL, Netflix NFLX, Vistra Energy Corp. VST and Amphenol APH. You can see the complete list of today’s Zacks #1 Rank stocks here.
Trump’s Policies
President Donald Trump talked about policies to boost the economy and lower taxes while softening his stance toward tariffs on China. The action has bolstered investors' confidence in the U.S. stock market.
Trump took a call to slash the corporate tax rate to 15% from the current 21%, which would ignite business growth and investment in the United States. However, Trump will raise taxes on businesses outside of America, which would bring hundreds of billions of dollars – perhaps trillions of dollars – into the US Treasury and help to pay down America’s massive debt. The move will drive companies to make products in America, boosting U.S. manufacturing and labor market and thereby providing a boost to the economy.
Additionally, President Trump called OPEC to boost production and reduce prices as a way of bringing the Ukraine war to an end. He signed executive orders to bolster U.S. oil and gas production. These actions would reduce energy prices, thus lowering overall prices for American consumers. If oil price falls, inflation will drop. Reduced inflation will allow the Federal Reserve to lower interest rates.
AI Investments
Donald Trump announced a new joint venture called Stargate, which plans to invest $500 billion for building new AI infrastructure in the United States. ChatGPT creator OpenAI, SoftBank, and Oracle ORCL will invest $100 billion in the project initially, with plans to pour up to $500 billion into Stargate in the coming years. The project is expected to create 100,000 U.S. jobs. Trump called it the “largest AI infrastructure project in history” (read: Trump Unveils Stargate AI Infrastructure Project: ETFs in Focus).
Solid Start to the Earnings Season
This reporting cycle is shaping up to be a good one for the market. Not only are companies comfortably beating estimates, particularly on the earnings front, but the growth pace represents a notable acceleration from the preceding periods. Total earnings for the 71 S&P 500 companies reported so far are up 19.2% from the same period last year on 6.7% higher revenues, with 83.1% beating EPS estimates and 67.6% beating revenue estimates. This is a better performance from the same group members than the other recent periods.
Let’s take a closer look at the fundamentals of SPY.
SPY in Focus
SPDR S&P 500 ETF Trust holds 504 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, consumer discretionary and healthcare accounting for double-digit allocation each.
SPDR S&P 500 ETF Trust has an AUM of $635.2 billion and charges 9 bps in fees per year. It trades in an average daily volume of 39 million shares and has a Zacks ETF Rank #2 with a Medium risk outlook (see: all the Large Cap Blend ETFs here).
Below, we have highlighted the abovementioned five best-performing stocks in the ETF.
Best-Performing Stocks of SPY
Moderna is a commercial-stage pharmaceutical company primarily focused on discovering and developing messenger-RNA (mRNA) based therapies. The stock soared 21.6% last week and accounts for a 0.03% share in the SPY portfolio.
Moderna has an estimated earnings growth rate of 4% for this year and a Zacks Rank #3.
Oracle is one of the largest enterprise-grade database, middleware, and application software providers. The stock accounts for a 0.57% share in the ETF and rose 14% last week.
Oracle has an estimated earnings growth rate of 11.9% for the fiscal year (ending May 2025). It has a Zacks Rank #3.
Netflix is considered a pioneer in the streaming space. The company evolved from a small DVD-rental provider to a dominant streaming service provider, courtesy of its wide-ranging content portfolio and a fortified international footprint. The stock jumped 14% last week and makes up 0.81% of the assets in SPY.
Netflix saw a solid earnings estimate revision of 95 cents over the past seven days for this year and has an estimated growth of 22.95%. Netflix currently has a Zacks Rank #2 (read: ETFs to Ride on Netflix's Big Subscriber Gains, Q4 Earnings Beat).
Vistra Energy is an energy company that offers electricity and power generation, distribution and transmission solutions. The stock accounts for a 0.12% share in the ETF and gained 11.8% last week.
Vistra Energy has an estimated growth rate of 35.3% for this year and a Zacks Rank #3.
Amphenol designs, manufactures and markets electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable. The stock rose 11.2% last week. It saw a positive earnings estimate revision of 8 cents over the past seven days for this year and has an estimated earnings growth rate of 19%.
Amphenol accounts for 0.10% of SPY's assets and currently has a Zacks Rank #1.
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