11 Stock Market Sectors: How to Access All the Different Markets

The information technology sector includes companies that produce software and other IT products and services. It also contains companies that manufacture hardware such as communications equipment, mobile phones, computers and semiconductor equipment. This sector has been a fast grower and contains some of the market’s largest companies.

• Alternatively, you could buy shares of best-of-breed individual stocks within each sector.
• You could’ve invested in real estate, tech, financials and consumer goods in addition to your energy stocks.
• This sector can offer significant growth opportunities as the world moves more online, but older companies face significant challenges from more dynamic entrants.
• I have no business relationship with any company whose stock is mentioned in this article.
• The U.S. stock market includes thousands of companies, and it’s easy to get analysis paralysis at the thought of choosing which to invest in.

Telecommunication services providers, including both wireless telecom networks and providers of old-style landline services, make up one wing of the sector. At the other end are media and entertainment companies, including both older media like television and radio and interactive media via the internet and newer forms of communication. The energy sector consists of all companies that play a part in the oil, gas, and consumable fuels business. It also includes the companies that refine the material and companies that provide or manufacturer the equipment used in the refinement process.

List of different sectors in the stock market

Some of the largest companies in the materials sector are Sherwin-Williams and DuPont. Some of the largest companies in the energy sector are ExxonMobil and Chevron. “While some investors are capable of predicting which sector is going to outperform another, it’s hard to do that,” Campos said. If you want to start building a better foundation for approaching the markets, sign up for my 30-Day Bootcamp. Let’s say last year you decided to invest in five stocks and hold them for the duration of 2019.

Companies such as Exxon Mobil and Chevron extract and refine gas, while companies like Kinder Morgan transport fuel to gas stations. The information technology – IT – sector consists of companies that develop or distribute technological items or services, and includes internet companies. Technology products include computers, microprocessors, and operating systems.

Utilities sector stocks are usually steady, conservative performers with regional geographic reach. The information technology sector includes companies in the software industry, technology hardware and equipment, and semiconductors & related semiconductor equipment (i.e., chipmakers). A stock market sector is a high-level grouping of publicly traded businesses that operate within the same general set of industries.

Market capitalization means the total market value of all of a company’s outstanding shares of stock. With stock market sectors, market capitalization is measured as the total value of all of the companies across each industry included in a particular sector. Within the sectors are industry groups, which then are split into industries and then further divided into sub-industries.

We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. The utilities sector encompasses just about every different type of utility company you can think of. Within the sector, you’ll find utilities specializing in making electrical power available to residential and commercial customers, as well as specialists in natural gas transmission and distribution.

Materials

These businesses engage in a wide range of services, such as exploring, drilling, refining, transporting, manufacturing equipment, and marketing. The energy sector experiences volatility and performs well when oil prices are high. So although energy vastly underperformed the S&P 500 in 2020, the sector turned around and produced the highest returns since then. Businesses in this sector provide financial services to commercial and retail customers.

The energy sector contains oil, gas, coal, and fuel companies, as well as energy equipment and services companies — the ones that build oil-drilling equipment or provide services to oil companies. The GICS system is revised from time to time, especially as industries grow and develop. Real estate companies and REITs were moved from the financials sector to their own separate sector in 2016.

The content on this website is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services. The Business Cycle Approach to Sector Investing provides details on how you can potentially take advantage of opportunities that arise due to the relative performance of sectors in each phase. MarketBeat’s analysts have just released their top five short plays for February 2023. MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… The materials sector consists of mining, refining, chemical, forestry and related companies that are focused on discovering and developing raw materials.

Companies in the sector extract and process raw materials before selling them to all other industry sectors. As such, its demand-side market-moving factors are particularly closely tied to the performance of the broader economy. Oil prices have a strong bearing on the performance of Energy companies, although different companies are affected differently. Producers of oil perform strongly during periods while its price is high, but oil refiners benefit when oil prices are lower. The amount of volatility in oil prices may make energy stocks attractive to speculators.

You will fail with this “plan,” and all the hopes and dreams you had of becoming the next millionaire day trader will soon be gone — along with your money. Keep in mind that just because a sector is having a strong day, that doesn’t guarantee it will last any longer than that day. Most of the companies in this sector rely heavily on recurring revenue, while some others earn the bulk of their revenue from advertising revenue .

Sector News

Since these companies are at the beginning of the supply chain, they are vulnerable to changes in the business cycle. You can check our sector Power Rankings here – where you can download the whole list of U.S. and international equity market ETFs in a spreadsheet to do your custom analysis. Use of this site constitutes acceptance of our Terms of Use, Privacy Policy and California forexee forex Do Not Sell My Personal Information. NextAdvisor may receive compensation for some links to products and services on this website. Take control of your financial future with information and inspiration on starting a business or side hustle, earning passive income, and investing for independence. Some of the largest companies in the technology sector are Apple and Microsoft.

They operate apartments, malls, offices, and senior living communities. If you have a relative in a nursing home, chances are the company operating that community is publicly traded in the real estate sector. The financial sector consists of banks, insurance companies, and real estate companies. If crude oil’s falling, you can bet that the companies in this sector are falling as well. However, these companies’ stock prices are usually stable, and their generous dividends can make them a good long-term hold, if you’re into that kind of thing. They may also be a good choice if you’re looking to get defensive in a rough market.

There are 11 stock market sectors, as classified by GICS, which stands for Global Industry Classification Standard. These sectors include healthcare, materials, real estate, consumer staples, consumer discretionary, utilities, energy, industrials, consumer services, financials, and technology. By contrast, the consumer discretionary sector includes businesses that produce and distribute goods for which demand generally depends on a consumer’s financial status. These are products consumers might consider purchasing with excess funds , including automobiles and related components, consumer durables , textiles, apparel, and other luxury goods.

iShares Semiconductor ETF

Titan Global Capital Management USA LLC (“Titan”) is an investment adviser registered with the Securities and Exchange Commission (“SEC”). Titan’s investment advisory services are available only to residents of the United States in jurisdictions where Titan is registered. tradeallcrypto broker review: your decent forex broker Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities. Any historical returns, expected returns, or probability projections are hypothetical in nature and may not reflect actual future performance.

While renewable forms of electricity consumption are included in the Utilities sector, Energy encompasses all other forms of energy production — specifically, oil, natural gas, and coal. IT stocks typically carry large premiums (reflecting the growth prospects of start-ups like Palantir or the ubiquity of established firms like Microsoft). However, this carries with it the risk that many tech stocks can be over-inflated, with unprofitable companies buoyed by growth potential until the market gives up on them. Companies specialising in areas like cloud computing, data analytics and machine learning/artificial intelligence will generally be categorised as Software & Services companies. Information Technology, or IT, is the sector concerned with the creation and distribution of technologies related to data and other forms of information. Information Technology includes many large, established companies but due to the highly innovative nature of the sector, it also contains plenty of newer, growth-oriented companies.

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The consumer discretionary sector also includes leisure products and services, such as restaurant stocks, hotels, casinos, and other businesses in the leisure industry. This sector includes companies that provide basic amenities and essential services like electricity, natural gas, water, sewage and waste disposal. These stocks tend to be some of the least volatile in the market and tend to pay steady dividends. They are considered conservative investments for low-risk-tolerant investors often seeking to earn income over growth. Some, like consumer staples, health care, and utilities, tend to have steady performance through even adverse market conditions, rising interest rates, tight monetary policy from the U.S. But this steady performance also means potentially sacrificing greater gains in times of strength for individual sectors.

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Companies in these groups typically have similar characteristics, from business models to products and services, customer bases, cost structures, and margin profiles. Stock market sectors are a set of categories into which companies and their stocks are sorted based on the primary nature of their business. Devised by S&P Global and Morgan Stanley Capital International , the Global Industry prime xtb forex broker review Classification Standard contains 11 official stock market sectors. A stock market sector is a group of stocks that have a lot in common with each other, usually because they are in similar industries. We categorize stocks into sectors to make it easy to compare companies that have similar business models. When investing, you can choose from stocks within the sectors that interest you.

Real estate sector

In 2020, I’ve focused on stocks moving on news related to the pandemic. These can be stocks in any sector — healthcare, industrials, and even the energy sector. Commonly referred to as the “tech sector,” companies in this sector include internet, software, and semiconductor companies. Also included are companies that manufacture electronic equipment, data processing, communication equipment, and IT services. Pharmaceuticals, healthcare equipment, and healthcare services companies are in the healthcare sector.