These 3 Sectors Are Crushing Tech in 2026. Time to Invest?

Core Insights - The tech sector, which has led the U.S. stock market for the past three years, is experiencing a downturn in 2026, with technology stocks down 3% year-to-date [1] - A significant sector rotation is occurring, with energy, materials, and industrials outperforming technology stocks [1] Sector Performance - Energy stocks are up 21.5% this year, driven by geopolitical factors such as U.S. foreign policy and tensions with Iran, which have positively impacted crude oil prices [7][5] - Materials stocks have increased by 17.6%, benefiting from a rebound in commodity prices and strong demand for metals related to AI infrastructure development [7][8] - Industrial stocks have risen by 12.3%, as companies like Caterpillar and Deere are seen as essential regardless of the AI race outcome [7][3] Investor Sentiment - There is a growing sense of AI fatigue among investors, particularly regarding the "Magnificent Seven" stocks, which are down 8.8% in 2026 [2] - Investors are shifting focus towards industrial and energy sectors, anticipating continued demand for essential equipment and resources [3][4]