The 11 stock market sectors

Stocks are sorted into 11 sectors based on what each company does. Here is what each sector covers and why the grouping is useful.

Stocks are commonly sorted into 11 groups called sectors. Each sector holds companies that do similar kinds of business. The news often says things like "energy led the market today" or "tech stocks fell". Those are references to sectors.

Where the 11 sectors come from

The standard list comes from the Global Industry Classification Standard, or GICS. It was created by S&P Dow Jones Indices and MSCI, two large index providers.

GICS places each company in a sector based on its main business. It then splits each sector into smaller industry groups and industries. Most major indexes, including the S&P 500 and the S&P/TSX Composite, use it.

The list is reviewed from time to time. Real estate became its own sector in 2016. Communication services took its current form in 2018.

The 11 sectors

1. Energy. Companies that find, produce, refine and move oil, gas and coal. Pipeline companies are here too. See why oil prices move the stock market.
2. Materials. Miners of gold, copper and other metals, plus makers of chemicals, steel, paper and packaging.
3. Industrials. Makers of machinery and aircraft, railways, airlines, trucking, construction and engineering firms, and business services.
4. Consumer discretionary. Things people want but can put off: cars, hotels, restaurants, clothing, and many retailers.
5. Consumer staples. Things people buy no matter what: food, drinks, household products and grocery stores.
6. Health care. Drug makers, medical device makers, health insurers and hospital operators.
7. Financials. Banks, insurers, asset managers, payment networks and stock exchanges.
8. Information technology. Software, computer hardware, chips and IT services.
9. Communication services. Phone and internet providers, media companies, video game makers and some large internet companies.
10. Utilities. Electric, gas and water companies, many of them regulated by governments.
11. Real estate. Companies that own or manage property, including real estate investment trusts, or REITs. A REIT is a company that owns income-producing property and pays out much of that income to investors.

Some placements surprise people

The labels do not always match what you might expect.

• Some large internet companies sit in communication services, not information technology.
• Some large online retailers sit in consumer discretionary.
• Payment networks sit in financials.

The placement depends on how GICS reads the company's main source of revenue.

Why sectors matter

They explain market moves. A sector often moves as a group, because its companies face similar conditions. A rise in oil prices tends to affect energy stocks together. A change in interest rates can affect banks and utilities together.

They show what an index is made of. The S&P 500 has a large weight in information technology. The TSX has much more weight in financials, energy and materials. That is a big reason the two markets often behave differently. See US vs Canadian markets and why Canadian banks matter to the TSX.

They help describe a portfolio. Investors use sectors to see how spread out their holdings are. A portfolio heavy in one sector depends a lot on that one part of the economy.

Cyclical and defensive sectors

People often group sectors into two broad types.

Cyclical sectors tend to rise and fall with the economy. Consumer discretionary, industrials, materials, energy and financials are often placed here.

Defensive sectors tend to be steadier, because demand for what they sell does not change much. Consumer staples, utilities and health care are often placed here.

These are general patterns. Any sector can behave differently in a given period.

Sector funds

Many ETFs hold only one sector, such as energy or health care. They let investors buy a group of companies in that sector in one trade. A sector fund is far less spread out than a broad index fund.

The short version

• Stocks are sorted into 11 sectors under the GICS system.
• Each sector groups companies by their main business.
• Sectors often move together because they face similar conditions.
• The S&P 500 leans toward technology; the TSX leans toward banks, energy and mining.
• Cyclical sectors track the economy more closely than defensive ones.

This is general information, not investment advice.

Updated 9 October 2026