uploads///Industrial Sector in February

What Hammered the Industrial Sector in February 2018?


Mar. 7 2018, Updated 7:31 a.m. ET

Industrial sector in February 2018

In the previous parts of this series, we analyzed how the broader market S&P 500 Index (SPX-INDEX) (SPY) and various sectors performed in February 2018. Almost all the sectors of the S&P 500 Index showed poor performances in February 2018.

The Industrial Select Sector SPDR ETF (XLI), which tracks the performance of the industrial sector, fell 3.8% in February 2018. General Electric (GE), Boeing (BA), 3M (MMM), and Honeywell International (HON), major holdings of the XLI ETF, fell 12%, 2.7%, 5.4%, and 4.9%, respectively, in February 2018.

Article continues below advertisement

Factors that affected the industrial sector

Like the financial sector, the industrial sector is also a growth-focused sector, and it is strongly correlated to the economic cycle. When growth prospects rise, the demand for industrial goods also increases, which drives this sector.

However, in February 2018, when the global growth outlook dampened and the expectation for an aggressive rate hike process by the Fed increased, it hurt investors’ sentiment in this sector. Higher rates could lead to costlier borrowing, which again could lead to lower capacity extension by various businesses and could affect the demand outlook.

In the next part of this series, we’ll analyze the performance of the consumer staples sector in February 2018.


More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.