🔥 Top Performer
Energy
+22%
YTD Return · Exxon +21% · Chevron +21.8%
Iran war shut Strait of Hormuz, slashing 20% of global oil supply. Brent peaked at $113/bbl in April before cooling to ~$80 post-ceasefire.
Why Energy surgedThe US-Israel war on Iran (Feb 28) blockaded the Strait of Hormuz — cutting 14M barrels/day from global supply. Exxon & Chevron were the primary beneficiaries.
📈 Strong Performer
Materials
+17%
YTD Return · Breadth extremely strong
Supply-chain reshoring and AI data-centre infrastructure buildout are lifting demand for raw materials across the board.
Materials momentumWith US onshoring accelerating and AI data centre construction booming, demand for copper, steel and industrial materials has surged well ahead of expectations.
⚙️ Rotation Winner
Industrials
+16%
YTD Return · Caterpillar +32%
Caterpillar alone contributed 1.9 percentage points to sector gains — its generators now power AI data centres, rebranding it as an AI play.
Caterpillar's AI pivotInvestors now view Caterpillar as an AI infrastructure stock. Its generators power data centres. The stock has returned +32% YTD — top single-stock contribution in its sector.
🛒 Safe Haven
Consumer Defensives
+13%
YTD Return · Walmart +13.7% · Costco +15.7%
Cost-conscious consumers are gravitating to Walmart and Costco as inflation, driven partly by elevated oil prices, squeezes household budgets.
The value-retail tradeWalmart's 4,600 US stores, within 10 miles of 90% of Americans, double as a logistics network. High-inflation environment is sending shoppers to discount retailers.
🔓 Unlocking Value
Small Cap (Russell 2000)
+5.6%
YTD Return · vs Large Cap +0.56%
Small caps trade at 18x forward P/E vs the S&P's 24x — near a historic discount. The "One Big Beautiful Bill" fiscal stimulus is seen as a direct tailwind.
Small cap discountSmall caps trade at a 22% discount to large caps on forward P/E — near historic lows. As the earnings gap narrows vs Mag 7, the rotation thesis is gaining fundamental support.
📊 Benchmark
S&P 500 (cap-weighted)
+0.5%
YTD Return · Dragged by Tech's 29% weight
The benchmark looks flat — but that masks a stark divergence. Equal-weighted RSP significantly outperforms, showing the rally has genuinely broadened.
The hidden rotation signalEqual-weighted S&P (RSP) is outperforming cap-weighted SPX by the widest margin in years. Gains are no longer concentrated in 7 mega-caps — the whole market is participating.
⚠️ Laggard After 3-Year Dominance
Technology (Mag 7 & Big Tech)
−0.4%
YTD Return · From 2nd best sector in 2025 to worst in 2026 · Large-cap growth index +0.13% YTD
The AI investment euphoria that lifted tech to a 2025 surge is cooling as earnings growth expectations normalise. The S&P 500's 86% total return over three years was built on multiple expansion, not earnings — and that premium is now unwinding.
After 3 years on topIn 2025 alone, large caps returned +19.78%. AI euphoria drove multiple expansion. Now, as earnings gaps with the rest of the market close, money is flowing to "real economy" stocks. Accenture's guidance cut in June '26 rattled Indian IT stocks in tandem.