Sector directory
Sector pages group companies that respond to the same forces — interest rates for financials, crude prices for energy, product cycles for technology. Reading a stock alongside its sector explains far more of its movement than the chart alone.
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Why sector classification is imperfect
Sector labels are conventions applied by index and data providers, and they group businesses that sometimes have very little in common. A payments company may sit under technology or financials depending on the provider, and a large conglomerate may be classified by its biggest revenue line while behaving like several sectors at once. Treat the label as a starting point, then read what the company actually sells.
What sector rotation means
Capital moves between sectors as conditions change: rate expectations, commodity prices, currency moves and the stage of the economic cycle all favour some sectors over others. This is descriptive, not predictive — knowing that defensive sectors have historically held up better in slowdowns says nothing about what any particular sector will do next.
Cyclical, defensive and rate-sensitive groups
Cyclical sectors such as industrials, materials and automotive depend on investment and discretionary spending. Defensive sectors such as consumer staples, utilities and healthcare see steadier demand through downturns. Rate-sensitive groups such as financials, real estate and utilities react directly to interest-rate expectations, though not always in the same direction as one another.