Wall Street has experienced a disappointing 2022 so far. U.S. stock markets saw astonishing growth in the coronavirus-ridden last two years owing to unprecedented fiscal and monetary stimuli and ultra-dovish monetary policies adopted by the Fed.

However, the complete devastation of the global supply-chain system, the shortage of labor, the lingering war between Russia and Ukraine and a zero-tolerance approach to COVD-19 infection taken by China resulted in global inflation, especially record-high inflation in the United States.

Global financial markets have been rattled by the Fed’s highly aggressive monetary stance to combat 40-year high inflation. The interest rate has already jumped 3.75% this year with more hikes underway. Yields on U.S. sovereign bonds have skyrocketed and the dollar price index reached a two-decade high.

Consequently, year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have plummeted 8.7%, 19.7% and 32.1%, respectively. Despite these severe headwinds several large-cap stocks are flying high in 2022. Investment in these stocks with a favorable Zacks Rank should provide solid returns in the near term.

A Relief Rally

U.S. stock markets have been witnessing an impressive rally since the beginning of October. We are not out of the woods as inflation remains elevated. In the post-FOMC meeting statement in November, the Fed Chairman clearly indicated that the terminal interest rate this rate-hiking cycle would be higher than 5%.

Yet, markets continue to rally on the assumption that the Fed may lower the magnitude of rate hike from the December FOMC meeting. A series of recently released economic data has also suggested that the central bank’s ultra-hawkish monetary policies have started giving the needed results, albeit at a slow pace.

The U.S. stock market momentum is likely to continue in November as the country’s GDP grew 2.6% in the third quarter, beating the consensus estimate of 2.2%. Market participants were worried that the economy might enter a recession after it contracted in the first two quarters of this year.

In third-quarter 2022, the chain-weighted price index — a cost-of-living index adjusted for consumer behavior — rose 4.1%, well below the consensus estimate of a 5.3%. The personal consumption expenditure (PCE) price index increased 4.2%, exhibiting a sharp fall from 7.3% in the second quarter. The core (excluding the volatile food and energy items) PCE price index — Fed’s favorite inflation gauge — rose 4.5% in the third quarter, in line with the market’s expectation.

Out Top Picks

We have narrowed our search to five large-cap (market capital > $10 billion) stocks that have popped year to date with solid upside left for the rest of 2022. These stocks have seen positive earnings estimate revisions in the last 30 days indicating that the market is expecting these companies to do good business in the near term. Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our five picks year to date.

Image Source: Zacks Investment Research

Archer-Daniels-Midland Co. (ADM Quick QuoteADM - Free Report) has been gaining from solid demand, improved productivity and product innovations. Persistent growth in the Nutrition segment of ADM, aided by significant gains in the Human and Animal Nutrition units, remains the key growth driver.

Archer-Daniels-Midland expects the nutrition segment to record operating profit growth of 20% in 2022. The company has been significantly progressing on its three strategic pillars — optimize, drive and growth.

Archer-Daniels-Midland has an expected earnings growth rate of 42.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the last seven days. The stock price of ADM has appreciated 42.6% year to date.

HF Sinclair Corp, (DINO Quick QuoteDINO - Free Report) operates as an independent energy company. DINO produces and markets gasoline, diesel fuel, jet fuel, renewable diesel, specialty lubricant products, specialty chemicals, specialty and modified asphalt, and others.

HF Sinclair also owns and operates refineries located in Kansas, Oklahoma, New Mexico, Utah, Washington, and Wyoming. DINO markets its refined products principally in the Southwest United States and the Rocky Mountains, Pacific Northwest, and other neighboring Plains states.

HF Sinclair has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.7% over the last 30 days. The stock price of DINO has soared 91.1% year to date.

LPL Financial Holdings Inc. (LPLA Quick QuoteLPLA - Free Report) has been benefiting from strategic acquisitions, including the buyout of Waddell & Reed's wealth management business. Solid advisor productivity and recruiting efforts are expected to keep aiding the advisory revenues of LPLA. Moreover, LPL Financial's efficient capital deployment activities reflect a solid balance sheet position.

LPL Financial has an expected earnings growth rate of 61.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the last 30 days. The stock price of LPLA has surged 68.1% year to date.

Marathon Petroleum Corp. (MPC Quick QuoteMPC - Free Report) is poised for further price gains based on a slew of positives. MPC’s $21 billion sales of its Speedway retail business provided it with a much-needed cash infusion. The deal also comes with a 15-year fuel supply agreement under which Marathon Petroleum will supply 7.7 billion gallons of gasoline per year to 7-Eleven, thus ensuring a steady revenue stream.

MPC’s exposure to more stable cash flows from the logistics segment diversifies the earnings stream and offers a buffer against the volatile refining business. Consequently, Marathon Petroleum is primed for significant capital appreciation and is viewed as a preferred downstream operator to own now.

Marathon Petroleum has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.9% over the last seven days. The stock price of MPC has jumped 86.1% year to date.

Halliburton Co. (HAL Quick QuoteHAL - Free Report) provides products and services to the energy industry worldwide. High commodity prices have increased demand for HAL’s services in North America, to which it is heavily exposed.

In particular, Halliburton’s key Completion & Production unit margins are likely to improve, with management expecting better pricing leverage going forward. Besides, Halliburton's strong free cash flow generating ability indicates its financial strength.

HAL’s healthy relationship with national oil companies and digitization efforts also bode well. The increasing cloud-based data flow between sites and back office translates into expanded margins for Halliburton.

Halliburton has an expected earnings growth rate of 92.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last seven days. The stock price of HAL has climbed 72.1% year to date.