The S&P 500’s Hottest Sector: Materials


Shares of the companies that mine or make raw materials are lately trading like once-hot technology stocks.

The S&P 500’s materials sector, which includes companies such as Linde PLC, Air Products & Chemicals Inc. and Sherwin-Williams Co., is up around 5.4% this month, even as the broader index has fallen more than 4%. The group has climbed 16% this quarter, the best performance among the S&P 500’s 11 sectors.

Some individual companies have posted even bigger gains. Crop-nutrient producer Mosaic Co. has risen 54% this quarter, while miner Freeport McMoRan Inc. has added 47%.

That’s a reversal from earlier in the year, when tech stocks including Apple Inc. and Google-parent Alphabet Inc. powered major indexes to new highs and the materials sector largely traded in line with the S&P 500. The tech sector Friday notched a third consecutive weekly decline, its longest string of weekly losses this year.

Fueling gains in materials shares: bets on an economic recovery, which have powered a rebound in prices for commodities like oil and industrial metals. Materials stocks began outpacing the broader index after the Federal Reserve in March announced it would do whatever it takes to support markets and the economy. By June, the Bloomberg Commodity Index—which in March hit its lowest point in at least 20 years—was rebounding.



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