The S&P 500 — the stock market’s most closely watched index — finished its longest bear phase since 1948 last Thursday closing at more than 20% from its October lows.

The index’s entry in the bull phase is pointing toward a new bull market amid Federal Reserve rate hikes, regional banking turmoil and rising inflation. Despite these destabilizing elements, the index rose 14% in the year-to-date period and 16% in the past 12-month period.

Notably, the Dow Jones Industrial Average and Nasdaq Composite moved up 2.8% and 29.6% year to date, respectively. In the past year, they rallied a respective 11.6% and 24.5%.

Amid such a backdrop, Caterpillar Inc. (CAT Quick QuoteCAT - Free Report) , Adobe Inc. (ADBE Quick QuoteADBE - Free Report) , AMETEK, Inc. (AME Quick QuoteAME - Free Report) and Copart, Inc. (CPRT Quick QuoteCPRT - Free Report) are among those S&P 500 members that are exhibiting strong fundamentals and impressive price performance.

What’s Boosting Market Sentiment

Markets are supposedly pricing on a greater chance of Federal Reserve’s hiatus on the interest rate hiking process, a decision to be taken tomorrow.

Economists believe that the ‘lagging impact’, the time taken by monetary and fiscal policies to impact the economy post their implementation, is yet to come. Hence, there’s a considerable probability for inflation to ease through a slowing down of economy.

While the economy may slow down, chances of the much-discussed 2023 recession have diminished to a great extent, as suggested by recent economic data.

In May, the US labor market added 339,000 jobs, the largest monthly addition since January. Atlanta Fed projects a 2.2% of GDP in the second quarter, which would mark the fourth consecutive quarter of expansion. An official recession is considered when there are two consecutive quarters of GDP decline.

A Cautious Approach is Important

Since there is no clear idea about the economy's direction, rational investors should be cautious with their choices. While they should avoid stocks that don’t possess fundamental strength, investors must not miss good entry opportunities in companies with robust revenue and earnings growth prospects.

Here are four stocks from the S&P 500 list that exhibit fundamental strength.

Caterpillar: The leading manufacturer of construction and mining equipment sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of B, a combination that our research shows offers the best investment opportunities. The stock has gained 12.6% in the past month. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus mark for the company’s earnings in 2023 has increased 2.6% in the past 30 days. Earnings and revenues are expected to rise 27.5% and 9.6% year over year, respectively, in 2023. CAT has a long-term (three to five years) earnings growth expectation of 12%.

Adobe: This diversified software company's shares rallied 38.6% in the past six months. Adobe currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B.

The Zacks Consensus Estimate for the company’s fiscal 2023 earnings moved up slightly in the past 30 days. Earnings and revenues are expected to increase 12.6% and 9.2% year over year, respectively, in fiscal 2023. ADBE has a long-term earnings growth expectation of 13.4%.

Adobe Inc. Price, Consensus and EPS Surprise

AMETEK: This provider of electronic instruments and electromechanical devices gained 5.4% in the past six months.

AMETEK carries a Zacks Rank #2 and has a VGM Score of B. The consensus estimate for the company’s 2023 earnings has inched up 0.8% in the past 30 days. Earnings and revenues are expected to increase 7.6% and 8.1% year over year, respectively, in 2023. AME has a long-term earnings growth expectation of 9%.

Copart: This provider of online auctions and vehicle remarketing services carries a Zacks Rank 2 and a VGM Score of B.

The consensus estimate for the company’s fiscal 2023 earnings has increased 2.6% in the past 30 days. Earnings and revenues are expected to increase 7.6% and 9% year over year, respectively, in fiscal 2023. The stock has appreciated 38.7% in the past six months.