Global equities: Sector rotation reshapes leadership – HSBC
|HSBC Asset Management reports that global equities were broadly stable, but sector rotation remains prominent, with investors shifting from expensive technology into cyclicals like Industrials and Materials. The firm also highlights 2026 leadership from Energy and Materials alongside strong performance in Consumer Staples, Utilities and small caps, underscoring a confusing mix of early-, mid- and late-cycle signals across equity sectors.
Cyclicals, defensives and small caps all bid
"But the investment clock seems to have gone haywire. Like some jet-lagged business executive, it can’t work out what time zone it is in."
"In 2026 so far, Energy (+19%) and Materials (+16%) are the sector leaders, with Industrials not too far behind. But defensive bets in Consumer Staples (+11%) and Utilities (+9%) are also performing strongly."
"And price action in small-cap stocks (+9%) confuses things even more. The signal seems to be that we are simultaneously in the early, mid, and late cycle!"
"Global equity markets were stable in a holiday-shortened week. In Europe, both the Euro Stoxx 50 and the UK FTSE 100 reached record highs."
"In the US, while the S&P 500 was set to close the week modestly higher, sector rotation remained a key theme, with investors continuing to shift out of relatively expensive tech stocks into cyclicals such as industrials and materials."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.