By Doug Busch
As we move further into the second half of 2025, industrials have emerged as the top-performing S&P 500 sector. The momentum could continue.
Technical analysis shows some of the sector's leading stocks are poised to bounce higher.
The Industrial Select Sector SPDR exchange-traded fund (ticker: XLI) has jumped an impressive 13% so far this year, outpacing the S&P 500's 6% climb.
On the comparison chart below, the ETF had closely tracked the broader S&P 500 over the past year, but began decisively outperforming it in May. Industrial Select Sector SPDR traded at $149.60 Friday.
Aerospace and defense has been the standout contributor among industrials, led by top holding GE Aerospace, which has surged more than 60% in 2025 alone. Heavyweights Boeing and RTX have also fueled the rally, with Boeing continuing to offer a dividend yield north of 3%.
But it's not just about defense -- the sector's strength reflects a broader surge across diverse industrial segments. Let's take a closer look at some of the most compelling names driving this momentum.
Deere & Co., a global giant in agriculture and construction machinery, has climbed 24% year to date.
Technically, round-number theory has played a pivotal role at the $500 level, which acted as resistance in February and March, and has since flipped into solid support beginning in May.
Leading stocks often present secondary buy points as they trend higher, and shares of the tractor maker are doing just that. A prior double bottom base, cleared in May, has now given way to the formation of another. In both cases, the right side of the pattern undercut the left -- an essential technical feature of the double bottom base. The next actionable entry is a breakout above $531.48. Friday afternoon, the stock was back toward that important $500 level, trading at $502.23. Stay constructive above it.
Uber Technologies stock, whose inclusion in the Industrial Select Sector SPDR just two years ago raised eyebrows, is trading 10% below its early July highs.
Still, the stock maintains on a solid uptrend, and looks ready for a rebound around the $85 level. That would fill the gap left from the June 23 session.
This price point, once strong resistance last October, has since flipped to reliable support during May and June. A double bottom base is taking shape here, and holding above $85 could set the stage for a rally past the $93.71 breakout trigger. So far in 2025, Uber stock has surged 45%, comfortably outpacing rival Lyft, which is up just 9%.
Uber traded at $86.46 Friday.
Axon Enterprise, formerly known as Taser, has been another strong performer in 2025, rallying 24% year to date.
True to round-number theory, the $700 level has played a critical role. It acted as a ceiling in the fourth quarter of 2024 and the first quarter of 2025, then flipped to a floor between February and April of this year.
As of late, Axon stock has been trading within the $700 to $800 range, briefly breaking above $800 before retreating back. Notably, on July 23 to 24, the stock dipped below $700 intraday but closed firmly above, reinforcing that level as key support.
This $700 mark also coincides with a successful retest of a cup base breakout from May, making it a pivotal point for bulls. Looking ahead, maintaining a long position seems prudent as long as Axon holds above $700.
Axon Enterprises changed hands at $735.87 Friday.
Write to Doug Busch at douglas.busch@barrons.com
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August 01, 2025 14:16 ET (18:16 GMT)
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