Investing What Are the Sectors and Industries of the S&P 500? Understanding the Makeup of the Economy, Stock Market, and Stock Market Indices By Joshua Kennon Joshua Kennon Twitter Website Joshua Kennon is an expert on investing, assets and markets, and retirement planning. He is the managing director and co-founder of Kennon-Green & Co., an asset management firm. learn about our editorial policies Updated on January 21, 2022 Reviewed by JeFreda R. Brown Reviewed by JeFreda R. Brown Facebook Instagram Twitter JeFreda R. Brown is a financial consultant, Certified Financial Education Instructor, and researcher who has assisted thousands of clients over a more than two-decade career. She is the CEO of Xaris Financial Enterprises and a course facilitator for Cornell University. learn about our financial review board In This Article View All In This Article Why Sectors & Industries Matter Communication Services Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Utilities Frequently Asked Questions (FAQs) Photo: traffic_analyzer / DigitalVision Vectors / Getty Images The general economy and stock market are organized into two tiers. The highest tier, a sector, is a broad grouping of companies with similar economic characteristics. There are 11 major sectors most investors use when breaking down the corporations and other issuers of securities such as stocks and bonds. Sectors are broken down into subcategories known as industries. This allows a closer grouping of similar businesses. For example, both Dollar Tree, a discount retail chain, and Tiffany & Company, a luxury jeweler, are included in the consumer discretionary sector. However, they are sorted into different industries. Why Sectors and Industries Matter Examining sectors and industries allows you to compare one business to its closest competitors. You may think a certain stock is a good purchase, but until you research its rivals, it's difficult to know for sure. Looking at sectors and industries helps you become familiar with how businesses interact with one another. For example, if you believe energy prices are going to decline, you might find transportation stocks appealing because you believe one of the biggest cost inputs—gasoline and jet fuel—is about to plummet. When combined with disciplined, long-term investing, such knowledge can be a ticket to building wealth. With exchange-traded funds (ETFs), you can buy a diversified basket of an entire grouping. ETFs are similar to mutual funds but trade like stocks, and allow you to get exposure to a wide range of investments in a sector or industry without needing to research individual stocks. Many financial advisers recommend that investors try to maintain a portfolio that offers good exposure to all of these industries and sectors. Communication Services From telephone access to high-speed internet, the communication services sector of the economy keeps us all connected and includes stocks such as AT&T and Verizon. Note Through the first quarter of 2020, the communications services sector experienced a 10-year growth rate of 39.02%. The S&P 500 during that time grew at a rate of 121.01%. The communication services sector is made up of five industries: Diversified Telecommunication ServicesWireless Telecommunication ServicesEntertainmentMediaInteractive Media & Services Consumer Discretionary The consumer discretionary sector consists of businesses that have demand that rises and falls based on general economic conditions. Products in this sector include everything from washers and dryers to sporting goods to new cars to diamond engagement rings and more. Examples of consumer discretionary stocks include Apple, Disney, and Starbucks. Note Through the first quarter of 2020, the consumer discretionary sector experienced a 10-year growth rate of 206.59%. The S&P 500 during that time grew at a rate of 121.01%. The consumer discretionary sector contains 11 industries: Automobile Components IndustryAutomobiles IndustryDistributors IndustryDiversified Consumer Services IndustryHotels, Restaurants & Leisure IndustryHousehold Durables IndustryLeisure Products IndustryMultiline Retail IndustrySpecialty Retail IndustryTextile, Apparel & Luxury Goods IndustryInternet & Direct Marketing Consumer Staples The consumer staples sector consists of businesses that sell the necessities of life, ranging from bleach and laundry detergent to toothpaste and packaged food. Note Through the first quarter of 2020, the consumer staples sector experienced a 10-year growth rate of 94.47%. The S&P 500 during that time grew at a rate of 121.01%. The consumer staples sector contains six industries and includes companies such as Procter & Gamble and Kroger: Beverages IndustryFood & Staples Retailing IndustryFood Products IndustryHousehold Products IndustryPersonal Products IndustryTobacco Industry Energy The energy sector consists of businesses that source, drill, extract, and refine the raw commodities we need to keep the country going, such as oil and gas. Major energy stocks include Exxon Mobil, Chevron, and Halliburton. Note Through the first quarter of 2020, the energy sector declined 48.08% over the previous 10 years. The S&P 500 during that time grew at a rate of 121.01%. The energy sector contains two industries: Energy Equipment & Services IndustryOil, Gas & Consumable Fuels Industry Financials The financial sector consists of banks, insurance companies, mortgage real estate investment trusts (REITs), credit card issuers, and a host of other money-centric enterprises that keep the debits and credits of the economy flowing. JPMorgan Chase, Goldman Sachs, and Bank of America are all examples of financial stocks. Note Through the first quarter of 2020, the financials sector experienced a 10-year growth rate of 61.12%. The S&P 500 during that time grew at a rate of 121.01%. The financial sector contains seven industries: Banking IndustryCapital Markets IndustryConsumer Finance IndustryDiversified Financial Services IndustryInsurance IndustryMortgage Real Estate Investment Trusts (REITs) IndustryThrifts & Mortgage Finance Industry Health Care The health care sector consists of drug companies, medical supply companies, and other scientific-based operations that are concerned with improving and healing human life. Examples of health care stocks include Johnson & Johnson, Gilead, and Pfizer. Note Through the first quarter of 2020, the health care sector experienced a 10-year growth rate of 177.15%. The S&P 500 during that time grew at a rate of 121.01%. The health care sector contains six industries: Biotechnology IndustryHealth Care Equipment & Supplies IndustryHealth Care Providers & Services IndustryHealth Care Technology IndustryLife Sciences Tools & Services IndustryPharmaceuticals Industry Industrials The industrial sector comprises railroads and airlines to military weapons and industrial conglomerates. Major industrial stocks include Lockheed Martin and CSX. Note Through the first quarter of 2020, the industrials sector experienced a 10-year growth rate of 82.66%. The S&P 500 during that time grew at a rate of 121.01%. The industrial sector contains fourteen industries: Aerospace & Defense IndustryAir Freight & Logistics IndustryAirlines IndustryBuilding Products IndustryCommercial Services & Supplies IndustryConstruction & Engineering IndustryElectrical Equipment IndustryIndustrial Conglomerates IndustryMachinery IndustryMarine IndustryProfessional Services IndustryRoad & Rail IndustryTrading Companies & Distributors IndustryTransportation Infrastructure Industry Information Technology The information technology (IT) sector is home to the hardware, software, computer equipment, and IT services operations that make it possible for you to be reading this right now. From microprocessors to printers, operating systems to cellphone handsets, recent advances in technology have turned IT into a giant part of the domestic and global economies. Top IT stocks include Microsoft and Alphabet. Note Through the first quarter of 2020, the information technology sector experienced a 10-year growth rate of 275.27%. The S&P 500 during that time grew at a rate of 121.01%. The information technology sector contains six industries: Communications Equipment IndustryElectronic Equipment, Instruments & Components IndustryIT Services IndustrySemiconductors & Semiconductor Equipment IndustrySoftware IndustryTechnology Hardware, Storage & Peripherals Industry Materials The building blocks that supply other sectors with the raw materials they need to conduct business, the materials sector manufacturers, logs, and mines everything from precious metals, paper, and chemicals to shipping containers, wood pulp, and industrial ore. Major materials stocks include Dow, Dupont, Ecolab, and International Paper. Note Through the first quarter of 2020, the materials sector experienced a 10-year growth rate of 38.41%. The S&P 500 during that time grew at a rate of 121.01%. The material sector contains five industries: Chemicals IndustryConstruction Materials IndustryContainers & Packaging IndustryMetals & Mining IndustryPaper & Forest Products Industry Real Estate The real estate sector includes all real estate investment trusts (REITs) with the exception of mortgage REITs, which are housed under the financial sector. The sector also includes companies that manage and develop properties and includes stocks such as American Tower, Simon Property Group, and Prologis. Note Through the first quarter of 2020, the real estate sector declined 2.77% over the previous 10 years. The S&P 500 during that time grew at a rate of 121.01%. The Real Estate sector is made up of two industries: Equity Real Estate Investment TrustsReal Estate Management & Development Utilities The utilities sector of the economy is home to the firms that make our lights work when we flip the switch, let our stoves erupt in flame when we want to cook food, make water come out of the tap when we are thirsty, and more. Utilities stocks include many local electricity and water companies including Exelon and Dominion Resources. Note Through the first quarter of 2020, the utilities sector experienced a 10-year growth rate of 86.97%. The S&P 500 during that time grew at a rate of 121.01%. The utilities sector is made up of five industries: Electric Utilities IndustryGas Utilities IndustryIndependent Power and Renewable Electricity Producers IndustryMulti-Utilities IndustryWater Utilities Industry Frequently Asked Questions (FAQs) What are the major sectors of the S&P 500? Information technology, health care, and consumer discretionary sectors are the top three sectors in the S&P 500. Combined, they make up more than half of the index, and information technology alone accounts for more than 25%. How do you invest in the S&P 500? As one of the most closely watched stock indexes, there are dozens of options for investing in the S&P 500—if not hundreds. Once you open a brokerage account, you can choose between any of the ETFs, mutual funds, or futures contracts that track the S&P 500. Your brokerage may not have every option available, but it will likely have at least one S&P 500 product. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. S&P Global. 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