Cyclicals have performed well since the reopening

Sources: Bloomberg, © 2021 – Morningstar Direct, All Rights Reserved1, and Wells Fargo Investment Institute, as of September 30, 2021. YoY = year over year. QTD = quarter to date. P/E = price/earnings. Yields represent past performance and fluctuate with market conditions. Current yields may be higher or lower than those quoted above. The S&P 500 Index is a market-capitalization-weighted index considered representative of the U.S. stock market. Index returns do not represent investment performance or the results of actual trading. Index returns represent general market results, assume the reinvestment of dividends and other distributions, and do not reflect deduction for fees, expenses or taxes applicable to an actual investment. An index is unmanaged and not available for direct investment. The cyclical index is the average growth across the sector indices for each period of the S&P 500 financials, energy, industrials, real estate, and materials sectors. The defensive index is the average growth across the sector indices for each period of the S&P 500 health care, utilities, and consumer staples sectors. The growth index is the average growth across the sector indices for each period of the S&P 500 communication services, consumer discretionary, and information technology. Past performance is no guarantee of future results. Investing in stocks involves risk and their returns and risk levels can vary depending on prevailing market and economic conditions. See “Index Definitions and Asset Class Risk Disclosures” link above for index definitions and equity sector risks.

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Key Takeaways

  • Backed by swift fiscal and monetary stimulus, cyclical sectors — specifically those tied to the reopening and recovery of the economy, such as the Energy, Financials, Materials, and Industrials sectors — have recently performed well.