Materials was the best-performing S&P 500 sector last Friday, rising 1.52%. The sector’s rally has broken out from its recent range taking it to its highest level since 3/3/26 and just 2% below a new all-time high.
The breakout also pushed Materials into extreme overbought territory, defined as two or more standard deviations above its 50-DMA, for the first time since 2/11. At 2.25 standard deviations above its 50-DMA, the sector is now its most overbought since 1/13. Only five trading days this year have seen Materials at a more overbought level, all in January.
Despite the sector’s proximity to a record high, participation since its February peak has been relatively narrow. Just 10 of the sector’s 24 stocks are higher, but their average gain of 14% has outweighed the losers’ average decline of 8.4%. Steel producers Nucor (NUE) and Steel Dynamics (STLD) have led by a wide margin, gaining 54.1% and 35.9%, respectively. At the other end, Martin Marietta Materials (MLM), Mosaic (MOS), CRH (CRH), and Newmont (NEM) are all down by double-digit percentages, with MLM falling the most at 18.9%.
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