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5 Best Stocks That Powered the S&P 500 ETF in Q1

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The first quarter has been strong for Wall Street. In fact, the S&P 500 is on track for its best first quarter since 2019 and the 12th strongest first quarter since 1945, having gained 10%. Strong corporate profits, enthusiasm around AI and hopes that the Fed will cut rates have bolstered investors’ sentiment, leading to a strong rally in the market.

SPDR S&P 500 ETF Trust (SPY - Free Report) , the proxy version of the S&P 500 Index, has risen 10.4% with just one trading session left to end the first quarter. While many stocks have powered the ETF, we have highlighted five that have gained at least 40% this year. These are Super Micro Computer Inc. (SMCI - Free Report) , Nvidia Corporation (NVDA - Free Report) , Constellation Energy Corporation (CEG - Free Report) , General Electric Company (GE - Free Report) and Deckers Outdoor Corporation (DECK - Free Report) .

The S&P 500, in a historic move, surpassed the 5,200 level for the first time ever last week, following the Fed’s signal to cut interest rates. This will mark the end of the most aggressive Fed hiking cycle and fuel corporate profits (read: S&P 500's Bull Run to Continue: ETFs to Bet On).

In the latest meeting, the Fed maintained its interest rates steady in a range of 5.25%-5.50% and signaled three rate cuts this year, citing expanding economic activity and easing but elevated inflation. Lower interest rates generally lead to reduced borrowing costs, helping businesses to expand their operations more easily and resulting in increased profitability. This, in turn, will stimulate economic growth and provide a boost to the stock market.

The continued expansion in AI applications added to the strength with many experts believing that the AI journey for market leaders has just begun and more innovations in this field will unfold.

Let’s take a closer look at the fundamentals of SPY.

SPY in Focus

SPDR S&P 500 ETF Trust holds 503 stocks in its basket, with each accounting for no more than 7% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, financials, healthcare and consumer discretionary accounting for a double-digit allocation each.

SPDR S&P 500 ETF Trust has an AUM of $526.3 billion and charges 9 bps in fees per year. It trades in an average daily volume of 63 million shares and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (see: all the Large Cap Blend ETFs here).

Below, we have highlighted the abovementioned five best-performing stocks in the ETF.

Best-Performing Stocks of SPY

Super Micro designs, develops, manufactures and sells energy-efficient, application-optimized server solutions based on the x86 architecture. The stock has skyrocketed 260% in the first quarter and accounts for a 0.1% share in the SPY portfolio (read: Super Micro to Join S&P 500, Shares Rally: ETFs to Buy).

Super Micro has an estimated earnings growth rate of 83.8% for the fiscal year (ending June 2024) and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

Nvidia is the worldwide leader in visual computing technologies and the inventor of graphic processing unit or GPU. The stock has jumped 82% in the first quarter. It has an estimated growth of 83.9% for the fiscal year (ending January 2025).

Nvidia makes up 5.1% of the assets in SPY and currently has a Zacks Rank #1. It has a Growth Score of B.

Constellation Energy generates and markets electricity. It sells natural gas, renewable energy and other energy-related products and services. The stock has jumped 58% in the first quarter. It makes up 0.13% of the assets in the SPY portfolio.

Constellation Energy has an expected earnings growth rate of 47.9% for this year and a Zacks Rank #2 (Buy). It has a Momentum Score of A (read: Energy ETFs Hit New 52-Week High on Oil Price Surge).

General Electric operates as a high-tech industrial company in Europe, China, Asia, the Americas, the Middle East, and Africa. It offers gas and steam turbines, a full balance of plant, upgrade, and service solutions, as well as data-leveraging software for power generation, industrial, government, and other customers. The stock has risen about 41% and has an estimated earnings growth of 9.7% for this year.

General Electric accounts for 0.4% of SPY's assets. It currently has a Zacks Rank #3 and a Momentum Score of A.

Deckers Outdoor is a leading designer, producer and brand manager of innovative, niche footwear and accessories developed for outdoor sports and other lifestyle-related activities. The stock has gained 40.3% and accounts for a 0.05% share in the SPY portfolio.

Deckers Outdoor has an estimated earnings growth rate of 10.8% for the fiscal year (ending March 2025) and a Zacks Rank #1 at present. It has a Growth Score of A.

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