Healthcare stocks have sharply outperformed the broader market over the past month, with the S&P 500 Healthcare Sector up more than 6%, far outpacing the S&P 500’s modest gain. A key driver has been exceptional strength in major pharmaceutical names, including strong earnings from Eli Lilly and big tariff exemption deals struck by Lilly, Novo Nordisk, and Pfizer with the Trump administration.

These catalysts, along with record-breaking sales of GLP-1 drugs like tirzepatide, have pushed heavyweight pharma stocks sharply higher, giving an outsized lift to the market-cap-weighted sector index.

With pharma leadership, defensive momentum, and recent outperformance, analysts suggest this may be a compelling moment for investors to consider adding exposure to the healthcare sector.

Finsum: Investors are also rotating into defensive sectors, such as healthcare, consumer staples, and energy, as concerns about market overvaluation and an AI-driven bubble grow.