A big rally followed by an even bigger selloff marked the postelection action on Wall Street this week, but the key trend was in place since before the midterms: the market's winners and losers are switching places.
For much of the year, energy and tech stocks led the S&P 500, gaining roughly 42% and 31%, respectively, through early October. Most other sectors lagged well behind.
In recent weeks, however, the pattern has reversed.
Consumer staples, healthcare, and real estate -- relative laggards for most of the year -- have emerged as the S&P 500's top performing sectors over the past month.
Other sectors have clawed back losses. Financials rebounded from a 1.7% year to date loss last month to a nearly 5% gain through Thursday's close. Utilities have also moved into positive territory after falling 6.4% earlier in October, while consumer discretionary has nearly erased its losses for the year.
Meanwhile, the sectors that led the market for most of the year have lost ground.
Information technology, up 31% a month ago, saw its gain shrink to less than 10% through Thursday's close. Communication services also reversed course, falling from a 4.8% year to date gain to a 10.3% loss. Industrials' advance has roughly halved, from 9.6% to 4.7%.
Even energy, still the year's best-performing sector with a gain of about 38%, has pulled back.
Analysts say that rising concern over AI capital expenditures and a blue wave over the midterms have investors looking for safer territory.
"The Blue Sweep is sparking volatility across markets," Evercore ISI analysts wrote in a note Friday. "Question is just how much campaign rhetoric becomes reality, especially around data centers, now a major driver of U.S. nonresidential construction spending, raising the economic stakes of any policy shift."
Declines in information technology and communication services, together accounting for about 45% of the S&P 500 by weight, helped drag the index's year to date performance down more than six percentage points over the past month.
There may still be a bigger trend that overshadows the recent shift. Since 1950, the stock market has always risen in the six months following a midterm election -- regardless of outcome.
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