Key Momentum Shifts

  • Technology Remains Leading: Information Technology (XLK) remains the only sector in the Leading quadrant, although its latest trajectory continues to point lower.
  • Health Care Remains Improving: Health Care (XLV) remains positioned in Improving, with its trajectory moving strongly upward.
  • Industrials Remain Improving: Industrials (XLI) continues to occupy Improving, indicating strengthening relative momentum despite remaining outside Leading.
  • Communication Services Remains Weakening: Communication Services (XLC) remains below the horizontal midpoint while retaining positive relative strength.
  • Seven Sectors Remain Lagging: Energy, Consumer Staples, Consumer Discretionary, Real Estate, Materials, Utilities and Financials remain in the Lagging quadrant.
  • Technology Leads Daily Performance: XLK gained 0.64%, recording the strongest daily performance among the eleven sectors.
  • Energy Nearly Unchanged: XLE declined only 0.06%, making it the second-best-performing sector despite remaining in Lagging.
  • Consumer Staples Underperforms: XLP declined 1.53%, recording the weakest daily performance among the eleven sectors.
  • Momentum Divergence: Daily sector performance continues to differ from broader relative momentum, with Technology gaining while several sectors remain in Lagging.

The latest Relative Rotation Graph for 30 September 2026 continues to show a concentrated momentum structure across US sectors. Technology remains the only sector positioned in Leading, while Industrials and Health Care occupy Improving. Communication Services remains in Weakening, while Energy continues to sit in Lagging alongside six other sectors. The chart therefore continues to show a clear concentration of relative strength in a limited number of market segments.

The chart also demonstrates that daily performance does not necessarily correspond with broader relative momentum. Technology gained 0.64% during the latest session and remained in Leading, while Energy declined only 0.06% but remained in Lagging. This divergence highlights the difference between one-session price performance and the broader momentum relationship captured by the RRG.

Momentum Breakdown by Quadrant

US Sector Relative Momentum Chart at the closing price of 30/09/2026. Powered by: amibroker.com.

Leading Quadrant

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

XLK gained 0.64% on 30 September, making it the strongest-performing sector during the session. The sector's position remains firmly above both the horizontal and vertical midpoints, confirming that Technology continues to represent the strongest area of relative momentum among the eleven sectors.

However, the trajectory shown on the chart continues to point lower after XLK previously reached a considerably stronger position within the quadrant. This suggests that Technology remains relatively strong, but its momentum is showing signs of moderation.

A continued downward movement toward the horizontal or vertical midpoint would indicate further deterioration in relative momentum. Conversely, a renewed upward trajectory would reinforce XLK's Leading position.

Improving Quadrant

Industrials (XLI) and Health Care (XLV) remain positioned in the Improving quadrant. Their locations above the horizontal midpoint but to the left of the vertical axis indicate improving momentum while relative strength remains below the Leading area.

Industrials declined 1.27% on 30 September, while Health Care fell 1.35%. Despite their negative daily performances, both sectors remain in Improving, demonstrating that a weak one-session return does not necessarily indicate deterioration in the broader relative-momentum structure.

Health Care's trajectory is particularly notable, with the sector moving strongly upward toward the centre of the RRG. Continued movement toward and eventually beyond the vertical midpoint would provide stronger evidence of improving relative strength.

For Industrials, sustained upward movement would similarly strengthen the possibility of a transition toward Leading. A Reversal lower, however, would indicate that the recent improvement is losing momentum.

Weakening Quadrant

Communication Services (XLC) remains positioned in the Weakening quadrant. The sector sits to the right of the vertical axis but below the horizontal midpoint, indicating that relative strength remains comparatively firm while momentum has weakened.

XLC declined 0.45% on 30 September. Although the sector remains to the right of the vertical midpoint, its position below the horizontal axis indicates that momentum has not yet recovered sufficiently to move back into Improving.

A sustained move above the horizontal midpoint would indicate renewed momentum, while continued movement downward and toward the vertical axis would signal further deterioration in relative strength.

Lagging Quadrant

Energy (XLE), Consumer Staples (XLP), Consumer Discretionary (XLY), Real Estate (XLRE), Materials (XLB), Utilities (XLU) and Financials (XLF) remain in the Lagging quadrant. This broad group continues to represent the largest concentration of sectors on the RRG.

Energy declined only 0.06% during the session, while Consumer Discretionary fell 0.28%. These relatively small declines demonstrate that short-term performance can remain comparatively resilient without translating into stronger relative momentum.

The remaining Lagging sectors recorded more significant losses. Consumer Staples declined 1.53%, Health Care fell 1.35%, Financials dropped 1.13%, Real Estate declined 1.04%, Materials fell 0.81% and Utilities dropped 0.68%.

The positioning of these sectors indicates that sustained upward movement toward the centre of the RRG would be required before they could transition into Improving.

Bottom Line

The 30 September 2026 US sector Relative Rotation Graph continues to show a concentrated momentum structure. Technology remains the only sector in Leading, while Industrials and Health Care remain in Improving. Communication Services is positioned in Weakening, while Energy remains in Lagging alongside Consumer Staples, Consumer Discretionary, Real Estate, Materials, Utilities and Financials.

Technology's Leading position received additional support from its 0.64% daily gain, although its trajectory continues to point lower. Industrials and Health Care retain improving positions despite recording negative daily performances. Communication Services remains in Weakening, while Energy's limited daily decline has not yet translated into an improvement in its broader RRG position.

Overall, the RRG indicates that Technology remains the principal area of relative strength, while Industrials and Health Care continue to show improving momentum. The key developments to monitor are whether XLK can stabilise its downward trajectory, whether XLI and XLV continue moving toward Leading, and whether XLC can recover above the horizontal midpoint. For the Lagging group, sustained upward movement toward the centre of the RRG would provide the clearest evidence of improving relative momentum.