We recommend overweighting the S&P 500 Materials sector. The sector accounts for just 1.9% of the S&P 500's market capitalization, so an overweight is cheap to implement, the same logic we applied to our Energy sector recommendation on April 20.
S&P 500 Materials is up 9.9% ytd, fifth behind Energy, Information Technology, Industrials, and Real Estate. The stock price index is near a record high. Forward operating earnings per share continues to climb back toward its 2022 peak (chart).
Materials’ 2026 EPS growth forecast is 39.7%, the third-highest among sectors (chart).
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