What are the sectors and industries in the S&P 500 index?

Understanding the composition of the economy, the stock market, and stock market indices

Why do sectors and industries matter?

Studying sectors and industries allows you to compare companies with their closest competitors. You may think that a particular stock is a good buy, but until you look at its competitors, it is hard to know for sure.

Looking at sectors and industries helps to understand how companies interact with each other. For example, if you believe energy prices will decline, you might find transportation stocks attractive because you think one of the biggest cost inputs – gasoline and jet fuel – is about to drop. When this coherent long-term investment is combined, this knowledge can be a ticket to building wealth.

With Exchange Traded Funds (ETFs), you can buy a diverse basket of a full range. ETFs are similar to mutual funds but trade like stocks, allowing you exposure to a wide range of investments in a sector or industry without the need to research individual stocks.

Many financial advisors recommend that investors try to maintain a portfolio that provides good exposure to all these industries and sectors.

Telecommunications Services

The telecommunications services sector includes access to phone and high-speed internet and includes stocks like AT&T and Verizon.

The telecommunications services sector is made up of five industries:

Diversified telecommunications services
Wireless telecommunications services
Entertainment industry
Interactive media and services

Luxury Consumption

The luxury consumption sector consists of companies whose demand rises and falls based on overall economic conditions. Products in this sector range from washing machines and sports equipment to new cars and diamond engagement rings, among others. Examples of luxury consumer stocks include Apple, Disney, and Starbucks.

The luxury consumption sector has 11 industries:

Automotive components industry
Automobile industry
Distributors industry
Diversified consumer services industry
Hotels, restaurants, and leisure industry
Household appliances industry
Recreation products industry
Multi-channel retailing industry
Specialty retailing industry
Textiles, apparel, and luxury goods industry
Internet and direct marketing industry

Essential Consumption

The essential consumption sector consists of companies that sell necessities of life, from bleach and laundry detergents to toothpaste and packaged foods.

The essential consumption sector has six industries and includes companies like Procter & Gamble and Kroger:

Beverage industry
Grocery and essentials industry
Food products industry
Household products industry
Personal products industry
Tobacco industry

Energy

The energy sector consists of companies that secure, drill, extract, and refine the raw materials needed to sustain the country, such as oil and gas. Major stocks in the energy sector include Exxon Mobil, Chevron, and Halliburton.

The energy sector comprises two industries:

Energy equipment and services industry
Oil, gas, and consumable fuels industry

Financials

The financial sector comprises banks, insurance companies, real estate investment trusts (REITs), credit card issuers, and a range of other finance-related companies that support debt and credit in the economy. JPMorgan Chase, Goldman Sachs, and Bank of America are examples of financial stocks.

The financial sector has seven industries:

Banks industry
Financial markets industry
Consumer finance industry
Diversified financial services industry
Insurance industry
Real estate investment trusts (REITs) industry
Savings and mortgage finance industry

Healthcare

The healthcare sector encompasses pharmaceutical companies, medical supply companies, and other science-based operations that focus on improving and healing human life. Examples of health stocks include Johnson & Johnson, Gilead, and Pfizer.

The healthcare sector has six industries:

Biotechnology industry
Healthcare equipment and supplies industry
Healthcare providers and services industry
Health technology industry
Life sciences tools and services industry
Pharmaceutical industry

Industrials

The industrials sector consists of railroads, airlines, military weapons, and industrial groups. Major industrial stocks include Lockheed Martin and CSX.

The industrials sector contains…

The industrial sector consists of fourteen industries:

Aerospace and defense industry
Air freight and logistics industry
Airline industry
Building products industry
Commercial services and supplies industry
Construction and engineering industry
Electrical equipment industry
Industrial conglomerates industry
Machinery industry
Marine industry
Professional services industry
Road and rail industry
Trading companies and distributors industry
Transportation infrastructure industry

Information Technology

The Information Technology (IT) sector is home to hardware, software, computer equipment, and IT services that enable you to read this now. From microprocessors to printers, from operating systems to mobile devices, recent advancements in technology have transformed information technology into a giant part of the local and global economy. Major stocks in the IT sector include Microsoft and Alphabet.

The Information Technology sector includes six industries:

Communications equipment industry
Electronic components and instruments industry
IT services industry
Semiconductors and semiconductor equipment industry
Software industry
IT hardware, storage, and peripherals industry

Materials

The materials sector provides the foundation that supplies other sectors with the raw materials they need to conduct their business, manufacturing and mining everything from precious metals and paper to chemicals, shipping containers, wood pulp, and industrial minerals. Key stocks in the materials sector include Dow, Dupont, Ecolab, and International Paper.

The materials sector includes five industries: