Energy and healthcare stocks thrive in 2025

The US stock market has had a challenging year so far in 2025, but energy and healthcare stocks are performing well. Energy stocks, tracked by the Energy Select Sector SPDR ETF, have increased by 8.0% this year. In contrast, the overall market is down 3.5%. Healthcare stocks also show solid growth, rising 6.6% this year. While many sectors have posted gains, they are generally small. Technology and consumer discretionary stocks have struggled the most, experiencing losses of 8.0% and 12.0%, respectively. The positive performance of energy and healthcare stocks stands out amidst these losses. The energy sector has seen volatile trading, leading to a mixed near-term outlook. Meanwhile, the healthcare sector has rebounded after a tough end to 2024. Experts suggest that the recent strength in healthcare is partly due to strong earnings reports and a rebound from fears about potential regulatory changes. Healthcare is traditionally viewed as a defensive investment. This means it tends to perform better during times of economic uncertainty. Analysts believe this context, along with strong company performances, is contributing to the sector's current momentum.