These 3 Sectors Are Crushing Tech in 2026. Time to Invest?
The Motley Fool
by newsfeedback@fool.com (Matthew Benjamin)February 20, 2026
AI-Generated Deep Dive Summary
The U.S. stock market has seen a significant shift in 2026, with energy, materials, and industrials sectors outperforming tech stocks. While technology dominated the market for the past three years, pushing the S&P 500 higher, these sectors have surged this year, leaving tech lagging behind by 3%. This rotation reflects broader economic trends and investor sentiment.
The decline in tech can be attributed to several factors. Rising interest rates have made high-growth tech stocks less attractive, as their valuations are heavily dependent on future earnings projections. Meanwhile, energy stocks have benefited from higher oil and gas prices, driven by geopolitical tensions and production constraints. Materials companies are also thriving due to increased demand for commodities, while industrials are boosted by stronger economic activity and infrastructure spending.
This sector rotation is significant because it signals a shift in investor priorities. With inflation still a concern, sectors tied to economic growth and commodity prices are gaining favor over tech, which is seen as more vulnerable to interest rate hikes and slower consumer spending. Additionally, these sectors offer higher yields compared to tech, making them more appealing to income-focused investors.
For readers interested in finance, this trend highlights the importance of diversification and staying attuned to macroeconomic factors. While tech remains a key driver of innovation and long-term growth, the current landscape suggests that energy, materials, and industrials could offer better returns in the short term. Investors should consider these shifts when evaluating their portfolios and adjusting their strategies accordingly.
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Originally published on The Motley Fool on 2/20/2026