Financials and real estate investment trusts (REITs) have displaced energy stocks as the performance leaders for US equity sectors this year, through yesterday’s close (Aug. 18), based on a set of exchange-traded funds.

Financial Select Sector SPDR (XLF) is currently the top-performer, posting a 29.1% total return year to date. After treading water for much of June and July, XLF popped earlier this month, reaching a record high before pulling back in recent days.

Real Estate Select Sector SPDR (XLRE) is the second-strongest sector performer this year, just behind XLF via a 29.0% gain. In contrast with XLF’s choppy performance of late, XLRE’s rise has been a relatively smooth affair.

Meanwhile, the formerly high-flying energy sector has hit turbulence this summer. Although Energy Select Sector SPDR (XLE) is the third-best 2021 performer, the ETF’s technical profile looks increasingly bearish after dispensing sector-topping performances for much of the year — as recently as late June.

All the main US equity sectors continue to post gains so far this year, but a wide divergence in results persists. The weakest performer: Consumer Staples Select Sector SPDR (XLP), which is up a relatively modest 8.1% in 2021.

The US stock market overall is ahead 18.2% via SPDR S&P 500 (SPY), which is roughly a middling performance relative to the gains for 11 sector funds.

Sector performances remain wide-ranging year to date, but upside momentum continues to dominate, based on a set of moving averages (see chart below). Contrarians will counter that with much of the market seemingly priced for perfection via trending behavior, the risk of a correction appears elevated. Perhaps, but momentum persists… until it doesn’t. The recent market wobbles may be a sign that this year’s rally is fading. If that’s a prelude to something darker beyond another round of short-term noise, we’ll see increasing support for a bearish view by way of ongoing deterioration in the technical profiles in the days and weeks ahead.