From Nasdaq:

2023 was a great year for the stock market, with the S&P 500 and related ETFs like SPY, IVV, and VOO ending the year with a 25% gain. Technology and Communication Services sectors drove the market returns, increasing by over 50% each. Investors are now looking to 2024 to see which sectors will shine.

Fidelity’s sector managers suggest that the leading and lagging sectors in 2024 will depend on macroeconomic factors. If the U.S. avoids a recession, the most promising sectors for this year include Materials, Industrials, and Consumer Discretionary.

The Materials sector is expected to recover due to its alignment with economic growth cycles and favorable supply-and-demand dynamics in segments like copper mining and U.S. chemical manufacturing. The Materials Select Sector SPDR ETF (XLB) and the Vanguard Materials ETF (VAW) track this sector.

The Industrial sector is poised for long-term growth with potential investment opportunities in onshoring, infrastructure, and sustainability. Various segments within this sector, such as commercial aerospace and utilities infrastructure, offer opportunities for 2024. The SPDR Select Sector Fund – Industrial (XLI) and the Vanguard Industrials ETF (VIS) track the sector.

The Consumer Discretionary sector performed well in 2023 due to the resilience of U.S. consumers. Looking ahead to 2024, the sector’s trajectory will depend on broader factors like the health of the economy and interest rate trends. Retailers with appealing valuations and defensive business strategies could stand out. The SPDR Select Sector Fund – Consumer Discretionary (XLY) and the Vanguard Consumer Discretion ETF (VCR) track this sector.



Read more: 2024’s Top Sectors For A Soft Landing: 3 Industries Leading The Way