S&P 500 Sector Performance: Healthcare & Consumer Staples Rally as Technology Stalls
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| By Sean Levine |
If you own big technology stocks, it probably felt like the market lost money between Sept. 11 and Oct. 23.
And by market value, it did, with the S&P 500 down 0.6% over the six-week lookback window.
But on an equal-weighted basis, the average S&P 500 stock actually GAINED 1.2% over the same period.
That marks a significant, 4.2-point improvement from the previous window, when the average stock lost 3%.
Gains were also fairly broad. 295 of the index's 503 members rose, up from 159 in the previous window.
The gap comes down to technology, which makes up 38% of the index by value, but just 15% of its members.
Just What the Doctor Ordered — A Rotation
First up, Healthcare led all 11 sectors, gaining 9.6% over the six weeks.
That was its 14th-straight positive window, after a gain of just 0.3% in the previous window.
Fueling the move, investors dumped AI-linked technology and moved into defensive sectors after unhelpful inflation data and fears about AI financing.
Within the sector, life-science tool makers rose as much as 31% on upbeat earnings and analyst upgrades.
All told, 53 of the sector's 60 members rose.
But Healthcare wasn't the only place investors looked for shelter.
Pantry Raid
Consumer Staples gained 5.5% over the lookback, the second-best sector, and reversing three-straight windows of losses.
Grocers, convenience stores and warehouse retailers led the way. They rose as much as 14%.
In fact, Bank of America (BAC) clients sold a RECORD $14.8 billion of individual U.S. stocks in one week. (Led, not surprisingly, by Tech.). But staples were among their few buys.
Carriers Lose Their Signal
On the flipside, Communication Services lost 6.1% over the six-week period, the worst of the 11 sectors. Only seven of its 22 members rose.
That was Comm’s third-straight losing window, continuing a 7.9% loss in the previous window.
The main culprit was SpaceX (SPCX), which agreed to buy nationwide spectrum — the airwaves carriers use — for its Starlink Mobile service.
Wireless carriers fell as much as 20% on the news as investors reassessed a business long viewed as a three-company club.
Likewise, cable companies fell as much as 25%, hurt by customer losses and competition from Starlink.
Bank Shots Miss
Coming in a distant second from bottom, Financials lost 1.4%, marking the sector’s fourth-straight losing window.
Specifically, the KBW Nasdaq Bank Index fell six straight weeks through mid-October — its longest losing streak since July 2008.
That's because higher yields cut the value of banks' bond holdings and raise the risk of loan defaults.
As a result, big banks and brokerages fell as much as 19%.
Slowing the bleeding somewhat, exchange and data companies rose as much as 28% over the same period, each on their own good news.
Momentum: Defensives In, Technology Out
But we don't just monitor winners and losers.
We also want to know which sectors shifted gears the most.
So, we look at how each sector did compared to the previous window.
First — and not surprisingly — Consumer Staples gained the most momentum. It improved 10.4 points and jumped from sixth place to second.
Healthcare closely followed. It gained 9.3 points and moved from third place to first.
On the downside, Information Technology (IT) was the only sector to lose momentum, falling 7.3 points from first place to seventh.
Bad inflation data, a China memory-chip headline and worries about CoreWeave (CRWV)'s debt hit technology hardest.
Meanwhile, software stocks rose as fears that AI would disrupt them receded.
Zooming out, the equal-weighted S&P 500 improved 4.2 points, while the “normal” index weighted by market value lost 2.1 points.
Again, thank you, technology.
What It Means for You
You don’t need to own the whole sector to follow the money. Our ratings point to a few ways in:
Healthcare: Johnson & Johnson (JNJ) earns a “B+,” a “Buy.” It raised its 2026 outlook this month.
Consumer staples: Coca-Cola (KO) earns an “A,” a “Buy,” our highest grade of any stock in recent reports. Costco (COST) earns a “B,” also a “Buy.”
Financials: Skip the big banks and look at the exchanges that held up. CME Group (CME) earns a “B,” a “Buy.”
And if you own big technology stocks, this is a reminder to keep them from crowding out everything else.
Stay tuned for more.
Sean Levine
Associate Director of Research
Weiss Ratings
P.S. This is just a slice of our new Weiss Sector Pulse report. Every two weeks, Weiss Ratings Plus members get the full picture: every sector, inside the S&P 500 and out, plus which ones are gaining momentum before the headlines catch up. Click here to get Weiss Sector Pulse with Weiss Ratings Plus.
