Market Rally Powers On as These 5 Stocks Show Strength Heading Into Q3

The S&P 500 closed last week at a new record high, with the Nasdaq following suit, underscoring investor confidence despite geopolitical turbulence and lingering tariff uncertainty. 

A strong month for equities is now in the books, fueled by better-than-feared earnings guidance, optimism around U.S.-China trade negotiations, and broad relief that some of President Trump’s more extreme tariff threats haven’t been enacted.

This bullish tone has left bears frustrated. “Every chance the market has had to break down has failed,” said Ken Mahoney of Mahoney Asset Management.

That failure to fall, combined with a wave of “buy the dip” behavior, has become the defining feature of this summer rally.

Still, investors remain on edge as the Senate debates Trump’s sweeping economic bill, and U.S.-Canada trade talks took a sudden turn with the White House halting all dialogue over a proposed digital tax.

Here are five names that caught our eye as June closes:

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The Coca-Cola Company | KO

Price: $70.74

Coca-Cola continues to deliver in 2025, up nearly 13% YTD and regaining its status as a defensive standout with upside.

Morgan Stanley recently reaffirmed KO as its top beverage pick, citing consistent organic sales growth, solid pricing power, and strong demand across global markets.

The company’s long-term appeal lies in its combination of brand strength and stable margins, even during inflationary periods.

With EPS growth expected to accelerate in the second half of the year and a 2.9% dividend yield to boot, KO appears well-positioned for investors seeking safety with upside.

Shares may appear fully valued at 28 times earnings, but the stock still trades at a discount to its five-year average.

A strong Q2 report in late July could push shares closer to Morgan Stanley’s $81 target.

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Kenvue Inc. | KVUE

Price: $20.92

Kenvue is a slow-moving name that’s starting to show signs of transformation.

While the stock has lagged this year, falling just over 2% YTD, Jefferies remains bullish, calling KVUE a “self-help story” with valuation upside.

The company’s recent Healthy Lives Mission Report highlighted significant progress on sustainability, reducing operational emissions by 37% and shifting 72% of global electricity use to renewable sources.

Meanwhile, early signs of a rebound in skin care and allergy categories are helping stabilize top-line performance.

With a nearly 4% dividend yield and a strong reinvestment strategy, Kenvue could appeal to ESG-focused investors or those seeking a value turnaround.

If margin improvements materialize in H2, this name may surprise to the upside.

Howmet Aerospace Inc. | HWM

Price: $186.10

Howmet is having a breakout year, up more than 69% YTD and currently trading near all-time highs.

The aerospace supplier reported record revenue and adjusted EBITDA in Q1 and exceeded all baseline guidance, thanks to robust demand in both the Fastening Systems and Engineered Structures segments.

CEO John Plant described the quarter as “a solid start to 2025,” and free cash flow jumped 41% year-over-year to $134 million.

With clean earnings beats and growing momentum in aerospace manufacturing, Howmet may continue to be a favorite among institutional buyers.

While valuation is rich at 60x trailing earnings, continued execution and bullish full-year guidance could support further gains into Q3.

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Kinder Morgan Inc. | KMI

Price: $29.40

Energy names are back in focus, and Kinder Morgan is quietly leading the charge.

The pipeline and storage operator has climbed nearly 6% YTD and could continue to benefit from elevated demand for natural gas and oil transport, especially if geopolitical tensions flare up again.

Zacks notes that Kinder Morgan’s earnings and revenue are projected to grow nearly 10% this year, and recent EPS estimate revisions have turned positive, a key factor in their proprietary rating model.

Though KMI trades at a premium to sector averages, its 4% dividend yield and exposure to long-term infrastructure trends make it a compelling income and inflation hedge.

Keep an eye on the company’s July 16 earnings for confirmation of margin resilience.

ADT Inc. | ADT

Price: $8.46

ADT has flown under the radar, but with shares up 22% YTD and a three-year total return of 46%, this security services provider is quietly gaining favor.

A 2.6% dividend yield, a low P/E ratio of 13, and improving profitability give ADT strong appeal to value-oriented investors.

The company’s shift from loss-making to steady earnings has been a key factor in its recent gains.

It also benefits from a recurring revenue model in a sector where demand remains durable, especially as economic uncertainty keeps consumers focused on home safety and protection.

Recent trading volume and modest analyst upgrades suggest momentum may build into earnings season. If margins continue to improve, ADT could break above its 52-week high.

June ends with the S&P 500 and Nasdaq at new records, marking a remarkable reversal from the spring selloff.

Despite the volatility in the Middle East and tariff uncertainty, bulls are clearly in control for now.

The big question heading into July: can the rally sustain itself through Q2 earnings season and a potential showdown in Congress over President Trump’s economic bill?

So far, 51 S&P 500 companies have issued positive guidance above the five-year average, which bodes well for upside surprises.

But with valuations stretched and political risks lurking, it’s likely to remain a stock picker’s market.

Names like KO and KMI offer defensive yield, while HWM and ADT represent momentum and turnaround stories. KVUE may be the wildcard, as an ESG bet with patient upside.