The 11 market sectors & how rotation works
Every US stock sits in one of 11 sectors. Money tends to rotate between them through the economic cycle — here’s each sector, its ETF and biggest names, and how to read the rotation.
What sector rotation is
Sector rotation is the tendency for capital to move from one group of the market to another as the economy shifts. Rather than every stock moving together, leadership passes between sectors — and relative strength (how a sector performs versus the broad market) is how investors track it.
The rough cycle map
As a broad generalisation, defensives (Staples, Utilities, Health Care) tend to hold up when growth slows; cyclicals (Industrials, Materials, Consumer Discretionary, Financials) tend to lead as it accelerates; Technology and Communication often lead early recoveries. It’s a tendency, not a rule — every cycle differs.
The 11 sectors
Technology
XLKHardware, semiconductors and enterprise/consumer software — the market’s biggest and most growth-sensitive sector.
Financials
XLFBanks, insurers, payment networks and asset managers — closely tied to interest rates and the credit cycle.
Health Care
XLVPharma, biotech, insurers and medical devices — a classic defensive sector with steadier demand.
Consumer Discretionary
XLYRetail, autos, travel and restaurants — cyclical spending that rises and falls with consumer confidence.
Consumer Staples
XLPFood, beverages, household goods and discount retail — steady demand that holds up when the economy slows.
Communication Services
XLCInternet platforms, media, streaming and telecom — a mix of megacap growth and slower-moving carriers.
Industrials
XLIMachinery, aerospace, defense and transport — cyclical names that tend to lead as growth accelerates.
Energy
XLEOil & gas producers, refiners and services — highly sensitive to commodity prices and the global cycle.
Utilities
XLUElectric, gas and water providers — defensive, dividend-heavy, and sensitive to interest rates.
Materials
XLBChemicals, metals & mining, and construction materials — early-cycle names tied to industrial demand.
Real Estate
XLREREITs across data centers, towers, industrial, retail and healthcare property — income-oriented and rate-sensitive.
Sector ETFs and representative holdings as of July 2026 (membership only, no weights). Source: stockanalysis.com.
See which sectors are leading right now
This page explains the map. Tradune’s Sector Rotation view tracks live relative strength — which sectors are actually leading and lagging today.
Open live Sector Rotation →Educational overview of sector structure and general cycle tendencies — not financial advice, and not a prediction of which sector will lead next. Sector membership is a periodic snapshot and changes over time.