Sector Rotation Accelerates as Metals, Semis and Defense Lead While Food, Telecom and Tobacco Lag
US industry leadership tilts toward cyclicals and tech-linked groups as rate, policy and commodity narratives reshuffle winners and losers
IMGELD Date: Jan 14, 2026
IT Services, Metals & Mining and Semiconductors are leading the current rotation, while Food Products, Tobacco and low‑growth telecom segments anchor the bottom of the list.
Executive Summary
Strength is concentrated in Metals & Mining, Semiconductors & Semiconductor Equipment, IT Services, Electronic Equipment and Capital Markets, reflecting demand for critical materials, AI‑linked hardware and software infrastructure, and buoyant US equity markets. Aerospace & Defense and selected consumer and real estate pockets remain firm as policy, spending and asset price tailwinds persist. On the downside, Food Products, Tobacco and parts of Consumer Finance and Diversified Telecommunication Services are weighed down by margin pressure, regulation and weak pricing power. Diversified Consumer Services and Professional Services show more mixed trends as US consumers face high prices and AI disruption reshapes white‑collar work. Utilities and Multi‑Utilities sit in the middle of the pack, as shifting fuel economics and regional coal‑to‑gas dynamics blunt clear directional signals. Overall, the tape continues to favor industries leveraged to AI, digital infrastructure, critical commodities and robust capital markets over more regulated, mature or price‑sensitive areas.
Top 10 Strongest Industries
(Long bias)
Metals & Mining
Final Score: 95.93
Before: #2 → Now: #1
Why they are strong: Demand for critical minerals across energy transition and technology supply chains is supporting a broad upturn in mining equities.
Key Players: Freeport-McMoRan, Newmont, Southern CopperSemiconductors & Semiconductor Equipment
Final Score: 92.66
Before: #1 → Now: #2
Why they are strong: AI and high‑performance computing demand is driving robust orders for advanced chips and the storage and compute infrastructure that depends on them.
Key Players: NVIDIA, Intel, ASMLIT Services
Final Score: 82.34
Before: #9 → Now: #3
Why they are strong: Rapid enterprise adoption of AI is boosting demand for IT service providers that can implement and integrate automation at scale.
Key Players: Accenture, IBM, Tata Consultancy ServicesElectronic Equipment, Instruments & Components
Final Score: 81.38
Before: #6 → Now: #4
Why they are strong: Rising AI‑driven data workloads are lifting demand for high‑end components and storage gear across networking and hardware ecosystems.
Key Players: TE Connectivity, Keysight Technologies, AmphenolCapital Markets
Final Score: 79.55
Before: #5 → Now: #5
Why they are strong: Record‑setting US equity indices are supporting capital markets activity, trading volumes and fee pools.
Key Players: Goldman Sachs, Morgan Stanley, Charles SchwabAerospace & Defense
Final Score: 79.36
Before: #4 → Now: #6
Why they are strong: Expectations for higher US defense spending are pushing defense contractors higher as investors position for larger budgets.
Key Players: Lockheed Martin, Northrop Grumman, RTXMedia
Final Score: 79.12
Before: #7 → Now: #7
Why they are strong: Improved advertising and streaming monetization are helping major US media groups, with investors rotating back into profitable content platforms.
Key Players: Walt Disney, Comcast, Paramount GlobalTechnology Hardware, Storage & Peripherals
Final Score: 78.21
Before: #3 → Now: #8
Why they are strong: AI‑related data growth is fueling strong demand for disk drives and storage systems from hyperscale and enterprise customers.
Key Players: Western Digital, Seagate Technology, Dell TechnologiesBanks
Final Score: 77.56
Before: #8 → Now: #9
Why they are strong: Anticipation around upcoming US bank earnings is keeping interest elevated in the sector as investors assess credit quality and net interest margins.
Key Players: JPMorgan Chase, Bank of America, Wells FargoAutomobiles
Final Score: 76.50
Before: #10 → Now: #10
Why they are strong: US auto sales are rising despite regulatory uncertainty, signaling resilient vehicle demand across major manufacturers.
Key Players: General Motors, Ford, Tesla
Bottom 10 Weakest Industries
(Short bias)
Tobacco
Final Score: 25.46
Before: #43 → Now: #42
Why they are weak: Large tobacco companies are guiding to slower growth as regulatory pressure and competition from vapes weigh on volumes and pricing.
Key Players: Altria Group, British American Tobacco, Philip Morris InternationalResidential REITs
Final Score: 26.82
Before: #42 → Now: #43
Why they are weak: Higher-for-longer rate fears and affordability pressures are limiting upside for US residential landlords despite tight rental markets.
Key Players: AvalonBay Communities, Equity Residential, Camden Property TrustConsumer Staples Distribution & Retail
Final Score: 27.15
Before: #44 → Now: #44
Why they are weak: Retailers focused on everyday staples face softer volumes as consumers react to high prices by trading down and curbing discretionary purchases.
Key Players: Walmart, Costco Wholesale, KrogerCommercial Services & Supplies
Final Score: 32.90
Before: #46 → Now: #45
Why they are weak: Business‑to‑business service providers remain under pressure as AI and automation raise questions over future headcount‑driven models.
Key Players: Waste Management, Cintas, Republic ServicesDiversified Consumer Services
Final Score: 34.29
Before: #45 → Now: #46
Why they are weak: High prices and slowing US consumer spending are weighing on discretionary services such as education, repair and personal support.
Key Players: Service Corporation International, Bright Horizons Family Solutions, H&R BlockWireless Telecommunication Services
Final Score: 35.50
Before: #47 → Now: #47
Why they are weak: Wireless operators face saturated markets and regulatory scrutiny, limiting pricing power even as 5G investment burdens remain high.
Key Players: Verizon Communications, AT&T, T-Mobile USDiversified Telecommunication Services
Final Score: 36.29
Before: #48 → Now: #48
Why they are weak: Traditional diversified telecom carriers continue to struggle with low growth, intense competition and regulatory headwinds.
Key Players: Lumen Technologies, Verizon Communications, AT&TLeisure Products
Final Score: 39.86
Before: #49 → Now: #49
Why they are weak: Discretionary categories such as toys and recreational gear are pressured as consumers reprioritize spending amid elevated living costs.
Key Players: Hasbro, Mattel, BrunswickFood Products
Final Score: 40.82
Before: #50 → Now: #50
Why they are weak: US tariff cuts on key foods like beef and coffee are increasing competitive pressure on producers and processors.
Key Players: Tyson Foods, Kraft Heinz, General MillsProfessional Services
Final Score: Not available in the file
Before: Not ranked → Now: Not ranked
Why they are weak: Professional service firms face structural pressure as advances in AI automation threaten a meaningful share of white‑collar tasks.
Key Players: McKinsey & Company, Boston Consulting Group, KPMG
Additional Readings
Metals & Mining: Critical minerals demand reshapes the global mining landscape (Reuters, 2025-12-29)
Every mineral is critical in the new metals ageSemiconductors & Semiconductor Equipment: AI wave fuels chip and hardware demand (Reuters, 2025-10-31)
Data storage firms Western Digital, Seagate soar on AI-driven demand spikeIT Services: Enterprise AI adoption underpins IT services demand (CNBC, 2025-11-26)
MIT study finds AI can already replace 11.7% of U.S. workforceElectronic Equipment, Instruments & Components: Hardware suppliers benefit from AI‑driven storage demand (Reuters, 2025-10-31)
Data storage firms Western Digital, Seagate soar on AI-driven demand spikeCapital Markets: Record US indices support capital markets revenues (CNBC, 2026-01-11)
S&P 500, Dow climb to closing records as traders look past Fed independence risk: Live updatesAerospace & Defense: Budget optimism lifts US defense contractors (Reuters, 2026-01-08)
Global defense stocks advance after Trump calls for higher US military budgetMedia: Media groups benefit as AI‑driven ad tools and strong markets support spending (CNBC, 2026-01-11)
S&P 500, Dow climb to closing records as traders look past Fed independence risk: Live updatesTechnology Hardware, Storage & Peripherals: Storage hardware rallies on AI‑driven data surge (Reuters, 2025-10-31)
Data storage firms Western Digital, Seagate soar on AI-driven demand spikeBanks: Investors position ahead of key US bank earnings (CNBC, 2026-01-14)
Stock futures lose ground as traders look ahead to more bank earnings: Live updatesAutomobiles: US auto sales rise despite policy uncertainty (Reuters, 2026-01-05)
US auto sales defy regulatory uncertainty to rise 2% in 2025 - ReutersAutomobile Components: Supply chains adjust as automakers seek to reduce China exposure (Reuters, 2025-11-15)
Tesla requires suppliers to avoid China-made parts for US cars, WSJ reportsFinancial Services: Banks expand in capital markets via M&A (Reuters, 2026-01-13)
U.S. Bancorp deepens capital markets presence with up to $1 billion BTIG buyConsumer Finance: Regulatory noise hits credit card and consumer lenders (Reuters, 2026-01-12)
Financial stocks fall as Trump’s credit card rate cap plan rattles investorsDiversified Consumer Services: High prices curb demand for non‑essential services (Reuters, 2025-12-05)
US consumer spending slows in September as high prices curb demandTobacco: Vape competition and regulation pressure legacy tobacco (Reuters, 2025-12-09)
BAT forecasts low 2026 growth as vape competition, regulation weighFood Products: Tariff cuts increase competition and pressure margins (Reuters, 2025-11-15)
Trump cuts tariffs on beef, coffee and other foods as inflation concerns mountMulti-Utilities: Rising gas prices drive coal’s temporary comeback in some US regions (Reuters, 2025-11-13)
Six US states to watch as rising gas prices drive a coal comebackHealth Care Technology: AI reshapes healthcare and related services (CNBC, 2025-11-26)
MIT study finds AI can already replace 11.7% of U.S. workforcePersonal Care Products: Beauty brands race to capture K‑beauty demand (CNBC, 2025-11-27)
TikTok-fueled K-beauty boom triggers a retail race in the U.S.Industrial Conglomerates: Traditional conglomerate model under pressure (Financial Times, 2025-12-30)
FTSE 100 loses the last of its industrial conglomeratesProfessional Services: AI threatens a significant slice of white‑collar work (CNBC, 2025-11-26)
MIT study finds AI can already replace 11.7% of U.S. workforceConsumer Staples Distribution & Retail: High prices reshape shopping patterns (Reuters, 2025-12-05)
US consumer spending slows in September as high prices curb demandCommercial Services & Supplies: Automation risk weighs on service-heavy business models (CNBC, 2025-11-26)
MIT study finds AI can already replace 11.7% of U.S. workforceHealth Care Providers & Services: AI adoption begins to influence healthcare delivery models (CNBC, 2025-11-26)
MIT study finds AI can already replace 11.7% of U.S. workforce