Sector Rotation: How investors can spot market trends

Sector rotation can change which parts of the stock market lead or lag. Could Energy and Materials be moving into the spotlight after years of technology dominance?

In this video, AJ Bell Investment Director Russ Mould explains how sector rotation works and why economic cycles, interest rates, valuations and commodity prices can influence the relative performance of different sectors.

Using the S&P 500 as a benchmark, the video examines the 11 major supersectors and explores why Energy and Materials have performed strongly in 2026, while Communication Services, Utilities and Consumer Discretionary have lagged.

You'll learn:

• What sector rotation means for investors
• Why Energy and Materials are performing strongly
• How interest rates affect different sectors
• Why technology has dominated recent years
• How AI spending is influencing technology stocks
• What history tells us about changing market leadership
• Why sector research matters before choosing a stock or fund

The video also looks at sector performance across the 2000s, 2010s and 2020s, highlighting how market leadership can change as economic conditions evolve.