Infrastructure stocks are surging.
The group took off Tuesday after Bloomberg reported that the Trump administration was considering a $1 trillion infrastructure plan meant to boost the U.S. economy.
U.S. Concrete shares jumped more than 22.5%.
The iShares U.S. Infrastructure ETF (IFRA), which tracks 135 stocks, closed 3% higher on Tuesday. It is down 14% year to date versus the S&P 500's 3% loss.
No official announcements have been made on the plan, but "at some point, infrastructure has to get done," Federated Hermes strategist Steve Chiavarone told CNBC's "Trading Nation" on Tuesday.
"It just makes too much sense," he said, adding that it's "almost impossible to tell" whether a plan will come to fruition before or after the November election.
As for the companies poised to benefit, Chiavarone suggested watching "domestically focused industrials."
"We think that the next great emerging market is the center of the United States," he said. "We've got space. We've got an educated workforce. We have low taxes. I think there's a real push to bring manufacturing back to the United States. You've got cheap energy."
"For those reasons, we think that an infrastructure plan makes all the sense because it makes the United States an even more attractive place to invest, and we expect that policymakers are going to push in that direction," Chiavarone said. "So, we really do like anything that's domestically focused in terms of their revenue exposure because we think the United States is going to be the place to invest in the years to come."
In the same "Trading Nation" interview, Ascent Wealth Partners managing director Todd Gordon highlighted two U.S.-based names: Deere & Co. and Cummins.
Deere, which makes heavy-duty machinery and industrial equipment, has some notable strengths, Gordon said, citing its status as an essential service, its exposure to agriculture and its strong May earnings report.
"This chart has been fairly range-bound," Gordon said. "If we can kind of pop through the 180 [level], you might start to get a collision of technicals starting to meet up with a strong fundamental story up."
Deere ended Tuesday's trading day up almost 2% at $158.30.
Truck engine maker Cummins was more of "a secondary play on the infrastructure bill," Gordon said.
"In the world of truck engines, Cummins is like a cult stock," he said. "It's a cyclical name. … It's not a value, low-volatility [stock]. There's been a lot of ups and downs here."
If the infrastructure plan becomes a reality, it should help boost Cummins' business and its stock, Gordon said.
"They've grown market share. They have a strong balance sheet, very little debt. It's a progressive company, to speak to the current times. They've got a good reputation as a good social corporate actor," he said.
While the stock has endured "a lot of volatility" between the $80 and $180 levels, it still yields just over 3%, which may be attractive to investors looking for that additional income, Gordon said.
Cummins shares closed more than 1% higher on Tuesday at $171.35.
Disclosure: Ascent Wealth Partners owns shares of Cummins.
