Markets

How the S&P 500 Sectors Have Performed Year-to-Date

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The year 2022 has been very challenging for the U.S. stock market. The value of the S&P 500 index has decreased by about 19.17% from the beginning of the year until now (YTD). The Dow Jones Industrial Average has seen a loss of 9.41% so far this year, while the Nasdaq Composite has lost more than 31%. The hawkish monetary policy established by the Fed in the U.S. and inflation achieving its top reading in over 40 years were the primary factors that led to the majority of the sell-off that took place.

The following table details the overall performance of the S&P sectors so far this year.

S&P 500 sector performance

Communication Sector 

Shares of communications services firms have had a year-to-date decline in value of 40.13 percent. This collection of companies carried a substantial amount of debt, which, when combined with rising interest rates and subsequent increases in the amount of interest that was payable each month, was a significant strain on the company's finances. In addition, interest rates continued to rise, which further increased the amount of interest that was payable each month. It is also usual for communications companies to have high dividend payout ratios, which made matters even more difficult for them. As a direct result of all of these challenges, this sector has had a terrible year. 

Here are some of the stocks that investors widely hold, and they are down over 50% YTD.

S&P 500 communication sector

Consumer Discretionary Sector 

This industry has lost more than 35% so far this year. It is important to keep in mind that this specific industry is representative of discretionary expenditure, and we are aware that, as a result of inflation and interest rates reaching multi-decade highs, disposable income was tremendously affected in a negative way. Consumers have been having a hard time keeping up with their cost of living and have been making cutbacks wherever they can find the opportunity. As a result, we saw a significant increase in the amount of competitive selling in this industry.

Here is a list of well-known companies in this industry that have had losses of more than forty percent year to date.

S&P 500 consumer discretionary

Tech Sector 

The technology sector of the S&P 500 saw a year-to-date decrease of 27.21%. The Federal Reserve proceeded to rapidly boost interest rates, which resulted in a slowdown in economic activity. Additionally, there was a great possibility that a recession would take place in the United States. As a result, a huge number of corporations reduced their CAPM. As a direct consequence of this, we saw a significant number of firms' stock prices significantly decline.

The following is a list of the stocks that have recorded poor performers in this industry over this year.

S&P 500 technology

Financial Sector 

This specific industry, which many people believed would do well, failed to impress on the scoreboard, and its value has dropped by more than 14% YTD. The Federal Reserve in the United States has recently boosted interest rates at the most aggressive levels in decades. This caused a tremendous amount of volatility in the market, which resulted in a significant number of banks reporting a respectable profit from their trading operations. In spite of this, many people have started to examine the state of their company's balance sheet as a result of rising interest rates because they are concerned about their ability to weather an economic downturn and maintain a healthy financial position. Despite this, the industry did not do nearly as poorly as expected this year, and it is in no way near the lows it reached earlier this year.

The following table details the performance of the stocks held by some of the most recognizable names in this industry.

S&P 500 financial sector

Consumer Staples 

When the economy shows signs of slowing down, investors and traders tend to flock to this specific industry since it works as a safe haven for their money. Although we anticipated that this industry would be the third highest performing industry, it has nevertheless posted losses of over 3% so far this year. As a general rule, during times of economic difficulty, this industry does see a larger proportion of mergers and acquisitions (M&A) activity because values decrease to a level that is more acceptable. On the other hand, this year there have been very few significant deals that have taken place. The following is a list of the more well-known stocks that currently sit atop the list of equities with the poorest performance.

S&P 500 consumer staples

Energy Sector

If there is one industry that has been able to give even the most inexperienced trader a significant tailwind, it is the energy industry. To participate in the trend or to purchase and hold for the rest of this year was all that was required of you.

The conflict in Ukraine drove up the price of energy to within striking distance of all-time highs; for example, the price of Brent oil peaked at $130 a barrel. As a result of Russia's occupation of more land this year that had belonged to Ukraine and the fact that it doesn't seem as if Russian President Vladimir Putin is going to back down from his present posture, geopolitical tensions are still very much firmly rooted in place.

The energy industry as a whole did exceptionally well, and it was the top-performing sector for the S&P with gains of 51%. In general, the energy sector's performance was quite positive. Here is a list of the most notable brands that, while being on the list of companies with the poorest performance, yet managed to make extremely respectable gains. I have also included several other well-known energy companies that are publicly traded and have done very well this year.

S&P 500 energy

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Naeem Aslam

I am a former Hedge Fund Trader with over 15 years of experience in investment banking. During my early career, I was awarded a national award (Young Irish Broker) in 2010. Over the years, I have worked with Bank of America in equity trading and with Bank of New York in hedge fund trading. I specialize in Blockchain technologies (cryptocurrencies and digital assets) and Sustainable Investments. In my career thus far, I have also extensively covered Equities, Commodities and Forex.

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