Stock Markets Analysis: Health Care Has Been a Top Sector

Late last year, I thought 2025 would be a year where some stocks (likely past laggards) would shine.

So far, that’s true. Market rotations are creating leaders out of past pained areas.

Health Care Has Been a Top Sector

For instance, health care stocks suffered in 2024. The S&P 500 health care sector, as represented by the exchange-traded fund Health Care Select Sector SPDR Fund (XLV), gained less than 3% last year, vastly underperforming the market.

But so far, health care has been a top sector in 2025. And some small-cap health care names are being backed by powerful institutional buying.

Recently, bullish sectors like technology and discretionary were negative for the year. But staples and health care, which were left for dead last year, showed 5.47% and 5.86% gains, respectively:

We were on top of this in November, when MAPsignals data indicated a strong pattern emerging in the health care sector.

On Nov. 15, 70 health care stocks were sold hard…too hard – they were oversold. When that happens, the sector tends to thrive afterwards. And history proves it.

Well, history is repeating itself.

Since that capitulation, XLV is up more than 6.5%. Notice how extreme outflows are typically great reversion signals:

But MAPsignals data doesn’t focus just on large-cap stocks alone. Our data covers stocks of all sizes.

And remember how I said small-cap health care stocks have flourished? Well, MAPsignals data is signaling just how strong that Big Money support is right now, highlighting the most-bought equities.

Small-Cap Health Care Stocks Soar

A big story in markets so far this year is small-cap health care stocks, though you may not hear that in the media too often.

Not long ago, S&P SmallCap 600 sector returns showed just how dominant health care has been ruling the small-cap world, rising nearly 5%:

When a sector is up that much, the specific stocks within it are booming.

And that’s been evident when you look at an ETF that captures the sector – the Invesco S&P SmallCap Health Care ETF (PSCH). As of this writing, it’s up more than 8.3% year-to-date.

Some of the top stocks held in PSCH are illuminating the MAPsignals data too. This is a great example of when having a market MAP comes in handy!

Shining Brightly Due to Big Money Support

When it comes to markets, 2025 is turning out to be a year of new leaders. That shouldn’t be surprising because that’s the nature of markets – they ebb and flow.

Some of 2025’s new leaders are emerging from the small-cap health care world. And they’re shining brightly due to Big Money support.

I said health care wouldn’t be oversold for long, and it’s true. History would suggest some of these smaller health care names will keep growing.

But which ones? The ones being lifted by Big Money.

And It always helps to use a MAP when trying to find the stocks with the most Big Money support.

If you’re a serious investor, Registered Investment Advisor (RIA), or a money manager looking for hedge-fund quality research, get started with a MAP PRO subscription today.