There’s been a notable shift in market sectors recently. The industrial sector, for instance, has outperformed the S&P 500 this year, climbing over 16%. Meanwhile, information technology and communication services, which had previously delivered significant profits, are also up by about 12% in 2025. In contrast, the S&P 500 has seen a more modest increase of less than 9% during the same period.
According to Peter Bookval from BFG Wealth Partners, industrial companies are benefiting from several favorable conditions. For one, the economy remains robust despite tariffs, which bodes well for production and investment. Additionally, these tariffs are designed to encourage manufacturing within the US while increasing costs for imports. However, it’s worth noting that not all industrial sectors are performing equally well.
For example, Ge Vernova, a spin-off from General Electric, has experienced a nearly 90% surge this year, becoming the second-best performing stock within the S&P 500. This rise can be attributed to the growing electricity demand driven by AI data centers, which has somewhat neutralized the negative effects of tariff policies. Ge Vernova is also at the forefront of developing small modular nuclear reactors, a technology currently in high demand among data center developers.
Similarly, stocks for Johnson Control International and Quanta’s services have also shown strong performance. Meanwhile, GE Aerospace shares have soared over 60%, fueled by high demand for new aircraft engines and the maintenance of existing ones. With older planes remaining in service longer, as Airbus and Boeing struggle to meet the demand for commercial jets, there’s been a corresponding increase in the need for engine replacements and repairs. Interestingly, Boeing itself has seen a gain of over 30% this year.
Despite what one might expect from Trump’s trade policies, which could hinder the aerospace sector—historically protected by tariff-free trade—the CEO of GE Aerospace, Larry Culp, expressed optimism earlier this month regarding a US-UK trade agreement and its potential to benefit the industry. However, 2023 has been a turbulent year for aerospace and defense contractors, especially after the president’s tariff plans were announced, leading to significant declines in April.
