Stock market sectors explained: the 11 GICS sectors (14 min)

Education only. Not financial advice. Company names on this page are examples by size, not recommendations. We never tell you to buy, sell or hold anything, we do not rank stocks, and we make no price predictions. Stocks can lose value, including all of it.

When you finish

You can name the 11 stock market sectors, explain how companies in each one earn money and what tends to move them, and spot the scam pitches that use "hot sector" hype.

Start here: what is a stock?

A stock is a share of ownership in a company. If the company does well, the stock may rise in value. If it does poorly, the stock can fall, and you can lose money. [Investor.gov: Stocks]

What is an index?

An index is a list of stocks used to measure part of the market. For example, the S&P 500 tracks 500 large US companies. You cannot invest in an index directly, but some funds try to copy one. [Investor.gov: Index funds] [S&P DJI: S&P 500]

What is a sector?

The Global Industry Classification Standard (GICS), created by MSCI and S&P Dow Jones Indices, sorts companies into 11 sectors based on their main business. [MSCI: GICS] [S&P Dow Jones Indices: GICS] Sectors help you see which parts of the economy are growing or struggling.

Do it now

Read the 11 sector cards. Focus on "How companies earn money" and "What moves it."
Scan the comparison table to see them side by side.
Read about funds and diversification.
Learn the scam red flags, then take the 5-question quiz.
Try it with AI. Paste the prompt into Grok or another free chat with a company you know.

The 11 sectors

About the examples: Each card lists the largest holdings by weight in that sector's Select Sector SPDR fund, as of Oct 29, 2026. State Street has renamed these funds "State Street® ... Select Sector SPDR® ETF". These funds cap how big any one company can be, so the order is close to, but not exactly, ranking by market value. Examples by size, not recommendations. [SSGA: SPDR funds]

1. Information Technology

What it is: Software, IT services, computers, phones, and the chips inside them. [MSCI: GICS] [GICS, by MSCI and S&P DJI]
How companies earn money: Selling devices and chips, and charging for software, often by subscription. (our summary)
What moves it: Business and consumer spending on tech, and interest rates, because much of the value of fast-growing companies is based on profits expected years from now. (our summary)
Who it may suit (in general): Readers interested in long-term growth who can handle big price swings. This is a general description, not advice for you.
Pros: Many companies with fast-growing sales. Software can earn high profit margins. (our summary)
Risks: Prices can fall hard when growth slows or rates rise. A few giant companies make up much of the sector. (our summary)
Examples by size, not recommendations: NVIDIA (NVDA), Apple (AAPL), Microsoft (MSFT), Advanced Micro Devices (AMD), Broadcom (AVGO). These are the largest holdings by weight in the Select Sector SPDR fund for this sector (XLK). [SPDR XLK holdings, as of Oct 29, 2026]

2. Health Care

What it is: Drug makers, medical device makers, hospitals, and health insurers. [MSCI: GICS] [GICS, by MSCI and S&P DJI]
How companies earn money: Selling medicines and devices, providing care, and collecting insurance premiums. (our summary)
What moves it: Drug trial results, patent expirations, and government health rules and pricing. (our summary)
Who it may suit (in general): Readers who want companies whose products people need in good times and bad. This is a general description, not advice for you.
Pros: Demand for care tends to hold up in recessions. Aging populations use more care. (our summary)
Risks: A failed drug trial or a new law can hit a company fast. Patents expire, letting cheaper copies compete. (our summary)
Examples by size, not recommendations: Eli Lilly (LLY), Johnson & Johnson (JNJ), AbbVie (ABBV), UnitedHealth Group (UNH), Merck (MRK). These are the largest holdings by weight in the Select Sector SPDR fund for this sector (XLV). [SPDR XLV holdings, as of Oct 29, 2026]

3. Financials

What it is: Banks, insurers, payment networks, asset managers and stock exchanges. [MSCI: GICS] [GICS, by MSCI and S&P DJI]
How companies earn money: Interest on loans, fees on payments and trades, and insurance premiums. (our summary)
What moves it: Interest rates, loan defaults, and the health of the economy. (our summary)
Who it may suit (in general): Readers who want to understand how money itself moves through the economy. This is a general description, not advice for you.
Pros: Many pay dividends. Earnings can rise when lending is strong. (our summary)
Risks: Loan losses rise in recessions. Heavily regulated. Bank failures can spread fear across the group. (our summary)
Examples by size, not recommendations: Berkshire Hathaway (BRK.B), JPMorgan Chase (JPM), Visa (V), Mastercard (MA), Bank of America (BAC). These are the largest holdings by weight in the Select Sector SPDR fund for this sector (XLF). [SPDR XLF holdings, as of Oct 29, 2026]

4. Consumer Discretionary

What it is: Things people want but can skip: cars, online shopping, restaurants, home improvement, clothing and travel. [MSCI: GICS] [GICS, by MSCI and S&P DJI]
How companies earn money: Selling goods and services to shoppers. (our summary)
What moves it: Jobs, wages and how confident shoppers feel. Spending here is often cut first when money is tight. (our summary)
Who it may suit (in general): Readers comfortable with ups and downs that follow the economy. This is a general description, not advice for you.
Pros: Can grow fast when the economy is strong. Includes many well-known brands. (our summary)
Risks: Sales can drop sharply in recessions. (our summary) Two companies made up about 40% of the fund (XLY) on Oct 29, 2026. [SPDR XLY holdings, Oct 29, 2026]
Examples by size, not recommendations: Amazon (AMZN), Tesla (TSLA), Home Depot (HD), McDonald's (MCD), TJX Companies (TJX). These are the largest holdings by weight in the Select Sector SPDR fund for this sector (XLY). [SPDR XLY holdings, as of Oct 29, 2026]

5. Consumer Staples

What it is: Everyday needs: groceries, household goods, drinks and personal care. [MSCI: GICS] [GICS, by MSCI and S&P DJI]
How companies earn money: Selling items people buy again and again. (our summary)
What moves it: Costs of ingredients and shipping, and whether shoppers switch to cheaper store brands. (our summary)
Who it may suit (in general): Readers who want steadier companies, often called defensive. This is a general description, not advice for you.
Pros: Demand tends to stay steady in recessions. Many pay dividends. (our summary)
Risks: Usually slower growth. Rising costs can squeeze profits. (our summary)
Examples by size, not recommendations: Walmart (WMT), Costco (COST), Procter & Gamble (PG), Coca-Cola (KO), Philip Morris International (PM). These are the largest holdings by weight in the Select Sector SPDR fund for this sector (XLP). [SPDR XLP holdings, as of Oct 29, 2026]

6. Communication Services

What it is: Phone and internet carriers, media, entertainment, video games, and online platforms like search and social media. [MSCI: GICS] [GICS, by MSCI and S&P DJI]
How companies earn money: Advertising, subscriptions, and phone and internet bills. (our summary)
What moves it: Advertising budgets (which shrink in slowdowns), user growth and regulation. (our summary)
Who it may suit (in general): Readers interested in how media and the internet make money. This is a general description, not advice for you.
Pros: Huge user bases. Carriers have steady monthly bills. (our summary)
Risks: Ad sales fall in slowdowns. Privacy and antitrust rules can change the business. A few giants dominate the sector. (our summary)
Examples by size, not recommendations: Meta Platforms (META), Alphabet (GOOGL, GOOG), Walt Disney (DIS), Take-Two Interactive (TTWO). These are the largest holdings by weight in the Select Sector SPDR fund for this sector (XLC). [SPDR XLC holdings, as of Oct 29, 2026]

7. Industrials

What it is: Aerospace and defense, machinery, construction, airlines, railroads and shipping. [MSCI: GICS] [GICS, by MSCI and S&P DJI]
How companies earn money: Selling equipment, building projects and moving goods, often on long contracts. (our summary)
What moves it: Factory activity, building and government spending, and fuel costs. (our summary)
Who it may suit (in general): Readers who want exposure to how things get built and moved. This is a general description, not advice for you.
Pros: Tied to real-world building and trade. Defense contracts can run for years. (our summary)
Risks: Sales follow the economy up and down. Big projects can run late or over budget. (our summary)
Examples by size, not recommendations: GE Aerospace (GE), Caterpillar (CAT), RTX (RTX), GE Vernova (GEV), Union Pacific (UNP). These are the largest holdings by weight in the Select Sector SPDR fund for this sector (XLI). [SPDR XLI holdings, as of Oct 29, 2026]

8. Energy

What it is: Oil and gas producers, refiners, pipelines and drilling services. [MSCI: GICS] [GICS, by MSCI and S&P DJI]
How companies earn money: Selling oil, gas and fuel, and charging to move or process them. (our summary)
What moves it: Oil and natural gas prices most of all, plus world events and demand. (our summary)
Who it may suit (in general): Readers who want to see how commodity prices affect companies. This is a general description, not advice for you.
Pros: Profits can jump when oil and gas prices rise. Many pay dividends. (our summary)
Risks: Profits can fall fast when prices drop. Faces long-term shifts toward other energy sources. (our summary)
Examples by size, not recommendations: ExxonMobil (XOM), Chevron (CVX), ConocoPhillips (COP), Marathon Petroleum (MPC), Phillips 66 (PSX). These are the largest holdings by weight in the Select Sector SPDR fund for this sector (XLE). [SPDR XLE holdings, as of Oct 29, 2026]

9. Utilities

What it is: Electric, gas and water companies, and independent power producers. [MSCI: GICS] [GICS, by MSCI and S&P DJI]
How companies earn money: Charging customers for power, gas and water, often at prices approved by state regulators. (our summary)
What moves it: Interest rates (utilities borrow a lot), regulators' rate decisions, and weather. Some utilities report rising demand from data centers. (our summary)
Who it may suit (in general): Readers who want steadier, often income-focused companies. This is a general description, not advice for you.
Pros: People pay power bills in every economy. Many pay dividends. (our summary)
Risks: Rising rates raise borrowing costs. Regulators limit what they can charge. Storms can cause big costs. (our summary)
Examples by size, not recommendations: NextEra Energy (NEE), Southern Company (SO), Duke Energy (DUK), Constellation Energy (CEG), American Electric Power (AEP). These are the largest holdings by weight in the Select Sector SPDR fund for this sector (XLU). [SPDR XLU holdings, as of Oct 29, 2026]

10. Real Estate

What it is: Mostly real estate investment trusts (REITs) that own buildings like warehouses, data centers, cell towers, senior housing and storage. [MSCI: GICS] [GICS, by MSCI and S&P DJI]
How companies earn money: Collecting rent. (our summary) To qualify, REITs must pay out at least 90% of their taxable income each year as dividends. [Investor.gov: REITs]
What moves it: Interest rates (they borrow a lot and compete with bonds for income buyers), and demand for each property type. (our summary)
Who it may suit (in general): Readers who want to learn how property earns income without buying a building. This is a general description, not advice for you.
Pros: Rent income. A way to own a slice of many properties. (our summary)
Risks: Rising rates can hurt prices. Some property types, like offices, can lose tenants. (our summary)
Examples by size, not recommendations: Welltower (WELL), Prologis (PLD), Equinix (EQIX), American Tower (AMT), Public Storage (PSA). These are the largest holdings by weight in the Select Sector SPDR fund for this sector (XLRE). [SPDR XLRE holdings, as of Oct 29, 2026]

11. Materials

What it is: Chemicals, metals and mining, construction materials, and packaging. [MSCI: GICS] [GICS, by MSCI and S&P DJI]
How companies earn money: Selling raw and processed materials to other businesses. (our summary)
What moves it: Commodity prices like copper and gold, factory and building demand, and the world economy. (our summary)
Who it may suit (in general): Readers who want to see how raw materials feed every other sector. This is a general description, not advice for you.
Pros: Benefits when building and manufacturing boom. Gold miners can behave differently from the rest. (our summary)
Risks: Prices of what they sell can swing a lot. Mining and chemicals face environmental rules. (our summary)
Examples by size, not recommendations: Linde (LIN), Newmont (NEM), Freeport-McMoRan (FCX), Vulcan Materials (VMC), Ecolab (ECL). These are the largest holdings by weight in the Select Sector SPDR fund for this sector (XLB). [SPDR XLB holdings, as of Oct 29, 2026]

Side-by-side comparison

The 11 GICS sectors at a glance (examples are not recommendations)
Sector	Main business	Big driver	Example by size
Information Technology	Software	Business and consumer spending on tech	NVIDIA (NVDA)
Health Care	Drug makers	Drug trial results	Eli Lilly (LLY)
Financials	Banks	Interest rates	Berkshire Hathaway (BRK.B)
Consumer Discretionary	Things people want but can skip	Jobs	Amazon (AMZN)
Consumer Staples	Everyday needs	Costs of ingredients and shipping	Walmart (WMT)
Communication Services	Phone and internet carriers	Advertising budgets (which shrink in slowdowns)	Meta Platforms (META)
Industrials	Aerospace and defense	Factory activity	GE Aerospace (GE)
Energy	Oil and gas producers	Oil and natural gas prices most of all	ExxonMobil (XOM)
Utilities	Electric	Interest rates (utilities borrow a lot)	NextEra Energy (NEE)
Real Estate	Mostly real estate investment trusts (REITs) that own buildings like warehouses	Interest rates (they borrow a lot and compete with bonds for income buyers)	Welltower (WELL)
Materials	Chemicals	Commodity prices like copper and gold	Linde (LIN)

Drivers are general descriptions, not predictions for any company.

Funds: owning many stocks at once

A mutual fund or exchange-traded fund (ETF) pools money to buy many stocks. An index fund tries to match an index, such as the S&P 500. A sector fund holds companies from one sector only, so it is less spread out than a whole-market fund. [Investor.gov: Mutual funds and ETFs] [Investor.gov: Index funds] Always read the fund's fees and holdings before deciding anything. We do not name or suggest funds.

Diversification

Diversification means spreading money across different investments so one bad result does not sink everything. It does not guarantee a profit or protect against loss. [Investor.gov: Asset allocation and diversification] Owning several companies in the same sector is less diversified than owning companies across many sectors.

Scam red flags

Guaranteed returns or "no risk." Every investment carries risk. Promises of high returns with little risk are a classic warning sign. [Investor.gov: Investor.gov: How to avoid fraud]
"Hot sector" hype. Fraudsters tie pitches to trending industries like AI or energy. [SEC/NASAA/FINRA: AI investment fraud alert]
Pump and dump. Promoters hype a small stock, then sell after the price jumps. [Investor.gov: Pump-and-dump]
Stock tips from strangers in group chats or social media. [FINRA: Avoid fraud]
Pressure to act now. [Investor.gov: How to avoid fraud]
Unregistered sellers. Check anyone selling investments on FINRA BrokerCheck or Investor.gov.

If it happened to you: report it to the SEC at the SEC's tip form, the FTC at ReportFraud.ftc.gov, or the FBI at IC3.gov.

Quick quiz

1. What does owning one share of stock mean?

You own a small piece of the company.

2. Which sector includes power and water companies?

Utilities.

3. Oil prices drop sharply. Which sector's profits are most directly affected?

Energy.

4. True or false: owning 10 tech stocks is well diversified.

False. They are all in one sector, so they can fall together.

5. Someone in a group chat promises a "guaranteed" 50% gain on an AI stock. What do you do?

Stop. Guarantees are a red flag. Don't send money, and report it at ReportFraud.ftc.gov.

Try it with AI

Copy this into Grok, ChatGPT, Claude, Gemini or another free AI chat. Replace the company name.

Explain the company [COMPANY NAME] to a beginner in plain English.
1. Which of the 11 GICS sectors is it in, and why?
2. How does it earn most of its money?
3. What outside things (interest rates, the economy, commodity prices) tend to affect that sector?
4. List its main business risks.
5. Link to its latest annual report (Form 10-K) on sec.gov so I can check.
Do not tell me whether to buy, sell or hold, and do not predict its stock price.

AI can be wrong or out of date. Check its answer against the company's filings on SEC EDGAR.

Money safety: Education only. Not financial advice. Stocks are not FDIC-insured and can lose value. Investing disclaimer

You did it

Mark this lesson complete when you have sorted one real company into its sector using the cards or the AI prompt.

I sorted one real company into its sector

Keep going

Sources

Checked November 1, 2026. Holdings as of Oct 29, 2026. Examples are not recommendations.

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