Wall Street is focused on rotation. Mag7 was in, now is out, but remains "in mind" for most investors. So which companies and which sectors are rising to the top so far this year in what has been a volatile start to 2026? We used our Argus screening tool to see which stocks are trading the most above their 52-week low. The sectors and companies that appear below give us clues about which sectors are weathering the current rocky conditions the best, and which might continue to do so if conditions remain challenging. The results show that there has been rotation, but often within the Information Technology sector, as IT remains the group with the most companies represented. Here are the stocks in the Argus coverage universe that are riding the rotation merry-go-round, with the percentage above their 52-week low also noted.

Last week, the U.S. Supreme Court struck down a large portion of the tariffs that have become a key element of President Trump's economic agenda. Many, though not all, tariffs during the second Trump administration have been imposed under the International Emergency Economic Powers Act (IEEPA). The IEEPA gives the president the power to regulate imports of foreign property, but only after the declaration of a national emergency to deal with tangible threats; it makes no mention of tariffs. By way of a six-to-three majority, the Supreme Court ruled that the IEEPA "does not authorize the president to impose tariffs." So what's next? Well, for one thing, the overall average effective tariff rate is likely to come down. The Yale Budget Lab now estimates that consumers will face an average tariff rate of 9.1%, lower than the prior mean tariff rate of 17.8%. Even so, these are the highest rates since 1946. For another, President Trump is certain to pursue other paths to reinstate tariffs. On Friday, he announced a 10% global tariff under a different authority (Section 122 of the Trade Act of 1974), and on Saturday, he raised that rate to 15%. The financial markets had a guardedly optimistic response to the Supreme Court's ruling, as investors prefer to have economic principles such as supply, demand, and comparative advantage establish prices in global markets. Fourth-quarter GDP data, released the same day, highlighted the negative effect of the government shutdown on the U.S. economy, though the impact of tariffs appears to have cut into growth in consumer and business spending. In the intermediate term, the uncertain future of tariff policy is likely to overhang the market.

Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. The company was founded in 1925. It is a component of the Dow Jones Industrial Average and the S&P 500 Index. Based in Irving, TX, the company has approximately 113,000 employees.

Raising Our S&P 500 Earnings Estimates The stock market has had a bumpy ride in 2026 to date, to put it mildly. In the employment economy, existing concerns about slowing jobs growth have been exacerbated by signs of increasing layoffs. Mixed signals from the White House -- on Greenland, Iran, and a range of domestic issues -- have kept investors on edge. Mainly, the on-again, off-again fear of an AI bubble is on again, and software stocks in particular are suffering as a result of that fear. Quietly in the background, consistently strong (and in fact accelerating) corporate earnings have helped ease concerns about the slowing employment economy and other actual and potential negatives. Based on a better-than-expected calendar 4Q25 earnings season to date, we are raising our final estimate of 2025 S&P 500 earnings from continuing operations. We are also raising our estimate of 2026 S&P 500 earnings and implementing a formal 2027 EPS forecast. Our 2026 and 2027 forecasts now assume corporate earnings can continue to grow at a low-double-digit percentage rate, and perhaps even at a low- to mid-teens percentage rate. There's no guarantee strong earnings can steady a wobbly stock market, but they can help keep valuations reasonable amid the tumult. Fourth-Quarter 2025 Earnings: Better Than Our Optimistic Expectations In the absence of government data, calendar 3Q25 earnings season had an outsized and largely positive impact on stocks. The government shutdown was in the rear-view mirror when the 4Q25 earnings season got underway. Fourth-quarter earnings have not dispelled the unease in the stock market, but they may have muted it somewhat. The cadence of any earnings season begins with Financial sector companies reporting in the first 10 days of the first earnings month (April, July, October, and January, depending on the quarter). In the final two weeks of that first month, the garden hose of earnings data turns into a firehose. Fourth-quarter earnings season tends to be a bit stretched out given that over 65% of component companies are also reporting calendar full-year earnings; and even companies on a June or September fiscal year tend to provide a calendar-year summation. For 4Q25 season, those two 'firehose' weeks stretched into the first week of February. As of 2/6/26, and with just under 60% of component companies having reported results, the blended annual growth rate for calendar 4Q25 earnings was about 13%, based on the earnings data compiled by industry analysis firms Bloomberg, FactSet, and Refinitiv. Given slight differences in baseline and definitions of continuing operations earnings, the range of the three compiling agencies was 12.5% to 13.5%, which is a little tighter than usual. From all three, the message of strong growth was unequivocal. The blended growth rate includes actual results for companies that have reported as well as estimated earnings for companies yet to report. Given that consensus estimates are often based on company guidance that historically has been conservative, actual results tend to exceed estimated results by a few percentage points. Final growth in calendar 4Q25 S&P 500 earnings from continuing operations could be in the 15% or higher range. Among the companies that have reported to date, just over three-quarters have reported earnings above the pre-reporting consensus; that is not far from the long-term 75% average. The magnitude of the EPS beat against expectations, in the high-single-digit range, has been above the midpoint of the long-term range of 5%-9%. Other highlights in the quarter include revenue growth in high-single-digit percentages as companies successfully navigate around tariffs -- and in many cases shift emphasis to earnings growth in overseas markets. Companies have also been able to expand their margins as volume leverage supersedes higher costs and tariffs and as managements begin to incorporate AI-based efficiencies into their operating models. Blended operating margin from continuing operations is on track to reach or exceed the 13% level for 4Q25 calendar earnings, which would be at least a point above the long-term average of 12%. The strongest contributors to S&P 500 earnings growth for 4Q25 have been Information Technology, Communication Services, Financial, and Industrial. The weakest sectors for EPS growth include Energy, Consumer Staples, and Consumer Discretionary. Stock market performance at the sector level is largely an inverse mirror of quarterly earnings performance. The best-performing sectors in the 2026 year to date include Energy, which is posting flat to slightly down 4Q25 EPS; Consumer Staples, which has reported 1% earnings growth; and Materials, which has reported 'okay' mid-single-digit EPS growth. The worst-performing sectors in the 2026 year to date include Information Technology, down in the stock market year to date despite posting high-20% EPS growth; Consumer Discretionary, which has reported a 1% earnings decline; and Financial, which has reported low-double-digit EPS growth. The divergence between EPS growth and sector performance is a not-uncommon phenomenon in a market characterized by anticipatory trading -- and where good past performance is an invitation to take profits. We are now estimating that the final tally of 4Q25 S&P 500 earnings could show growth at a mid-teens percentage rate, better than our earlier expectations for high-single-digit to low-double-digit growth. On that basis, we have raised our forecast for S&P 500 earnings from continuing operations for 2025 to $274 from a prior $270. Once all S&P 500 component companies have reported calendar 4Q25 results, our final number for 2025 could go up (or down) by a dollar or so; but $274 is likely very close to the final number. Our 2025 forecast now assumes annual EPS growth of 10.5% from 2024, raised from 9.3%. 2026 and 2027 Earnings Estimates We have raised our forecast for S&P 500 continuing operations earnings for 2026 to $315 per share from a prior $300. Our 2026 forecast now assumes annual EPS growth of 15.6% from 2025, raised from 11.1%. The key driver of our higher EPS forecast for 2026 is a stronger EPS growth outlook at the sector level nearly across the board. The strongest increments to growth in our model are for Information Technology, Industrial, Materials, Financial, Communication Services, and Consumer Discretionary; all are expected to grow earnings at low-double-digit rates in 2026. We also raised our sector growth forecasts for defensive sectors including Consumer Staples, Healthcare, Utilities, and Real Estate; all are expected to grow earnings at mid-single-digit rates in 2026. We continue to expect a weak to negative earnings performance for Energy in 2026, even though it has been the best-performing stock sector year to date in 2026. Global prices for most petroleum products (excluding natural gas) remain near multi-year lows, reflecting weak demand amid plentiful production. Our very preliminary forecast for 2027 earnings from continuing operations had been $325. Based on 2025 performance, revisions to our 2026 model, and forecast inputs for 2027, we are now formally modeling S&P 500 earnings from continuing operations for 2027 of $363 per share. Our formal 2027 forecast now assumes annual EPS growth of 14.9% from 2026, raised from a preliminary 8.7%. Conclusion Investors are usually bullish in January, but the market turned volatile late in January of this year. The S&P 500 was up as much as 2% before slipping to a 1.4% gain for January in the final trading week of the month. The final result was not far off the average 0.98% gain on the S&P 500 for all Januarys from 1980 to 2025 February by contrast has tended to be a challenging month. Average S&P 500 performance in February over the 1980-2025 period has been a gain of 0.10%. February's 'win rate' (the percentage of times February has been positive on the S&P 500) is also low at 57%, matching the July win rate; September is the worst at 50%. February 2026 was deeply down until a nearly 2% surge on 2/6/26 bought the S&P 500 back to January-ending levels. Stocks tend to bounce back with a 1.1% gain in March. All first quarters on average since 1980 have generated appreciation of 2.3% on the S&P 500, which is better than the dismal 3Q average and behind 2Q and 4Q performance. The stock market is now in the second year of the presidential election cycle, which historically has been the weakest of the four years. In 2026, tariffs will have a full-year impact on prices; but they have faded as the leading topic on investors' minds. Geopolitics adds uncertainty to the outlook. Mid-term elections and the Supreme Court decision on tariffs are both looming. Recurring fears of an AI bubble are likely to continue battering growth stocks from time to time. Investors could point to a strong 4Q25 earnings season as an offset to the market's many challenges. We believe they will be able to point to similarly strong EPS performances as the 2026 trading and earnings year plays out.