U.S. stocks saw the strongest first half of a year since 2013 on expectations that the Trump administration will deliver on the much-awaited policy changes. But as prospects for such initiatives dwindled in the later part of the first half, the gains were driven by strong corporate earnings, more confident consumers and a 16-year low unemployment rate.

Tech companies were some of the best performers in the first half, resulting in the splendid performance for the Nasdaq in almost eight years, while the financials space also gave healthy returns on the back of solid stress test results.

Stocks also benefited from improving global economics, particularly, in the Eurozone. The European economy is looking up, with factories in the first half ramping up at the fastest rate for over six years. Thanks to this bullish trend, it seems prudent to take a look at the best performers in the first half, which also have the potential to move further north.

Dow and S&P 500 Post Best First-Half Gains Since 2013

The Dow Jones and the S&P 500 each gained around 8% in the first six months of the year, their best performance since 2013. The rally was initially boosted by expectations that the Trump administration will be able to deliver on its pro-business policies, including “massive” tax cuts, deregulation and uptick in infrastructure outlays.

However, as chances of Trump getting his policies through Congress ebbed, gains have continued on the back of solid corporate earnings and U.S. consumers showing signs of confidence about their finances.  

Q1 Sees Highest Earnings Growth Level in 5 Years

Total earnings for the S&P 500 members that have reported quarterly results already are up 13.4% from the same period last year on 7.1% higher revenues, with 72.5% beating EPS estimates and 65.5% beating revenue estimates.

Earnings growth scaled the highest level in over five years and growth was driven by almost all the sectors. Significant number of companies beat the consensus estimate, including revenue estimates. While the Financial sector lead the earnings space earlier in the reporting cycle, the baton was ultimately handed over to a host of other spaces like tech, industrials, basic materials and energy (read more: Taking Stock of the Earnings Picture). 

Consumer Confidence High, Jobs Market Upbeat

Consumers, in the meanwhile, are more confident about their ability to pay bills and cover other necessary expenditures. The Consumer Confidence index rebounded to 118.9 in June from 117.6 in May. The Present Situation Index also rose from 140.6 to 146.3. Consumers’ estimation of prevailing business conditions has also improved this month. The Conference Board’s Director of Economic Indicators said that consumers’ outlook on the economy touched a near 16-year high in June (read more: Consumers Remain Confident: Buy These 5 Top-Rated Picks).