Key Momentum Shifts

  • Technology Remains Leading: Information Technology (XLK) remains in the Leading quadrant, although its latest trajectory has turned lower after reaching a relatively strong position.
  • Industrials Remain Improving: Industrials (XLI) are positioned in Improving, with the sector continuing to move toward stronger relative momentum.
  • Communication Services Enters Weakening: Communication Services (XLC) has moved below the horizontal midpoint and is now in Weakening.
  • Energy Remains Weakening: Energy (XLE) is firmly positioned in Weakening despite recent Volatility in Crude Oil prices.
  • Seven Sectors Remain Lagging: Health Care (XLV), Consumer Staples (XLP), Consumer Discretionary (XLY), Real Estate (XLRE), Materials (XLB), Utilities (XLU) and Financials (XLF) remain in Lagging.
  • Technology Leads Daily Performance: XLK gained 0.80% on 25 September, supporting its position in Leading.
  • Industrials Show Strong Daily Performance: XLI gained 0.95%, the strongest daily performance among the eleven sectors, while remaining in Improving.
  • Momentum Divergence: The RRG shows a significant disconnect between daily performance and broader relative momentum, particularly across Industrials, Financials and Energy.

The latest Relative Rotation Graph for 25 September 2026 shows a highly concentrated momentum structure across US sectors. Technology is the only sector positioned in Leading, while Industrials is the sole sector in Improving. Communication Services and Energy occupy Weakening, while the remaining seven sectors are positioned in Lagging.

The chart highlights the difference between daily performance and relative momentum. Industrials delivered the strongest daily gain at 0.95% but remains in Improving, while Financials gained 0.57% but remains in Lagging. Similarly, Energy declined 0.89% and remains firmly in Weakening despite continued sensitivity to oil prices.

Momentum Breakdown by Quadrant

US Sector Relative Momentum Chart (at the closing price of 25/09/2026). Powered by: amibroker.com

Leading Quadrant

Information Technology (XLK) is the only sector positioned in the Leading quadrant. Its location in the upper-right area indicates relatively strong momentum and relative strength compared with the broader market.

XLK gained 0.80% on 25 September, supported by renewed enthusiasm surrounding artificial intelligence. Microsoft rose strongly after unveiling additional Copilot capabilities, including coding functionality and an always-on AI agent. Akamai Technologies also surged after announcing an $11.6 billion cloud-services deal with Anthropic, reinforcing the positive sentiment around AI infrastructure and applications.

However, the chart shows that XLK's latest trajectory has turned lower after reaching a relatively high position within Leading. This suggests that although Technology remains in the Leading quadrant, its momentum should be monitored for further deterioration.

A continued movement downward and toward the vertical axis would indicate a reduction in relative momentum, while a renewed upward trajectory would reinforce its Leading position.

Improving Quadrant

Industrials (XLI) is the only sector positioned in the Improving quadrant. Its location above the horizontal midpoint but to the left of the vertical axis indicates improving momentum while relative strength remains below the Leading area.

XLI gained 0.95% on 25 September, recording the strongest daily performance among the eleven sectors. The advance came as broader market sentiment improved, while August core capital-goods orders pointed to continued Business Investment and resilient economic activity.

The trajectory of XLI is particularly important because continued movement upward and toward the right would provide stronger evidence of improving relative strength and could eventually lead to a transition into Leading.

Weakening Quadrant

Communication Services (XLC) and Energy (XLE) are positioned in the Weakening quadrant.

Communication Services is located just below the horizontal midpoint and close to the vertical axis. XLC declined 0.90% on 25 September, making it the weakest-performing sector in the daily performance data. The decline came despite broader gains in technology stocks, indicating that the strength within growth-oriented equities was concentrated rather than broad-based.

The current position indicates that relative strength remains comparatively firm, but momentum has deteriorated sufficiently for the sector to move into Weakening. A recovery above the horizontal midpoint would provide evidence of renewed momentum.

Energy (XLE) is positioned much deeper in Weakening. The sector declined 0.89% as crude oil prices eased amid renewed hopes for progress in Middle East negotiations. Falling oil prices reduced the immediate support for energy equities, while easing yields helped broader Equity sentiment. (Unlike XLC, Energy remains well below the horizontal axis, indicating more pronounced deterioration in relative momentum.

Lagging Quadrant

Health Care (XLV), Consumer Staples (XLP), Consumer Discretionary (XLY), Real Estate (XLRE), Materials (XLB), Utilities (XLU) and Financials (XLF) remain in Lagging.

The seven sectors recorded mixed daily performances. Health Care gained 0.49%, Consumer Staples advanced 0.44%, Utilities increased 0.38%, Materials rose 0.24%, Consumer Discretionary added 0.22%, Financials gained 0.57%, while Real Estate declined 0.22%.

Despite positive daily returns across six of these sectors, their positions in the lower-left quadrant indicate that broader relative momentum remains weak. This is particularly evident in Financials, which recorded a solid daily gain but remains well inside Lagging.

Real Estate also remains deep in Lagging, reflecting continued sensitivity to elevated Treasury yields. On 25 September, yields remained elevated even as they eased from earlier highs, maintaining pressure on rate-sensitive assets.

A sustained upward movement toward the centre of the RRG would be required before these sectors could transition into Improving.

Bottom Line

The 25 September 2026 US sector Relative Rotation Graph shows a highly concentrated momentum structure. Technology is the only sector in Leading, while Industrials is the sole sector in Improving. Communication Services and Energy are positioned in Weakening, while seven sectors remain in Lagging.

Technology's Leading position is supported by its 0.80% daily gain and renewed AI enthusiasm, although its latest trajectory has begun to turn lower. Industrials delivered the strongest daily performance at 0.95% and remains in Improving, making its continued upward trajectory an important development.

Communication Services has moved into Weakening, while Energy remains deep in Weakening despite changes in the oil-price environment. Meanwhile, Financials and several defensive sectors remain in Lagging despite positive daily returns.

Overall, the RRG indicates that Technology remains the principal area of relative strength, Industrials are improving, while most other US sectors continue to exhibit weaker relative momentum. The next important developments will be whether XLK can maintain its Leading position, whether XLI progresses toward Leading, and whether XLC can recover above the midpoint or XLE begins moving back toward the centre of the RRG.