Industrial Sector "Fireworks" Ignites! Policy Windfalls + AI Infrastructure Boosts Lead-Rising US Stocks

Zhitong Caijing APP has learned that US stocks have recently hit new highs, but surprisingly, the leading sector is not large tech companies. The Industrial Sector (XLI) has performed exceptionally well this year, leading to a new high in the S&P 500 index. Data shows that the sector has risen by 16% so far this year, exceeding gains in the Tech Sector (13%) and Public Utilities Sector (11%).

The surge in aerospace and defense capabilities, the push for data centers driven by artificial intelligence, and investments in power infrastructure have all contributed to a batch of "high-flying stocks" in the Industrial Sector.

On Tuesday, Boeing (BA.US) released quarterly earnings that exceeded expectations, indicating that its recovery process is continuing to move forward. This aerospace giant's stock price has risen by 28% since the beginning of the year, ranking second only to AI chip giant NVIDIA (NVDA.US) in the Dow Jones Industrial Average. Boeing has become one of the main beneficiaries of President Trump's external trade policies. In May, Boeing received a massive order from Qatar Airways, and as part of the UK-US trade framework, it secured procurement commitments from British Airways.

General Electric Aerospace (GE.US) has also noted that its overseas orders have driven up engine orders. The company's stock price has risen by more than 60% this year, with income and earnings per share both increasing by over 20% in the previous quarter.

The Industrial Sector's strong performance highlights the Trump administration's policy orientation towards promoting industrial revitalization through external trade and internal incentives, including capital expenditures and tax deductions for industries that have returned to the United States. This bill is expected to provide continuous support for the sector.

Yung-Yu Ma, chief investment strategist at PNC Asset Management Group, said, "We believe this fiscal policy will help drive strong performance in the Industrial Sector over the next few quarters." "We believe that the Industrial Sector still has strong momentum and is not yet at its peak. It should be considered to be in the middle stage."

The demand for power equipment driven by artificial intelligence data centers and grid upgrades have also boosted the stock prices of power equipment manufacturers. General Electric Energy (GEV.US) has seen its stock price rise by more than 90% since the beginning of the year, with orders surging in the previous quarter primarily due to strong demand from data centers.

Meta (META.US), Microsoft (MSFT.US), Amazon (AMZN.US), and Alphabet (GOOGL.US) are expected to spend a combined $32.5 billion in 2025, committed to continuing the construction of artificial intelligence infrastructure. CFRA research analyst Jonathan Sakraida said, "Due to the massive expenditures of large tech companies, recent data center construction has been incredibly impressive." "For all this to happen, the Industrial Sector's prosperity is a prerequisite."