Industrial Stocks

Last week saw a market divergence, with industrials rising and financials/tech falling due to AI concerns. Despite a late-week S&P 500 rebound on inflation data, the index ended lower, with investors doubting a March Fed rate cut. Industrials and consumer staples rallied, while AI fears impacted banks and tech giants like Alphabet. However, cybersecurity stocks showed resilience. Economic signals suggest the Fed will pause rate hikes, with potential cuts later in the year.

Amidst AI hype, infrastructure and industrial stocks are gaining attention due to policy shifts and reshoring trends. Experts like Mike Atkins see a bullish setup, while Global X’s Ryan O’Connor highlights infrastructure’s role in supporting the AI boom, referencing the Global X U.S. Infrastructure Development ETF (PAVE). PAVE is up 16% YTD. The U.S. Electrification ETF (ZAP) is also thriving, indicating the sector’s growth is sustainable as AI and electrification demands increase.