Materials are the worst performer in the S&P 500 this year. What 2025 holds for this beaten-down sec

By Isabel Wang

There might be a bullish story underway for materials stocks in 2025 - but watch out for this wild card

U.S. stocks are wrapping up another year with stellar gains, but not every sector is in the party spirit.

The S&P 500's materials sector XX:SP500.15 is the worst-performing corner among the large-cap benchmark index's 11 sectors so far in 2024, according to FactSet data.

With a 0.6% year-to-date decline, the sector tracking companies that produce or manufacture metals, chemical products and construction materials has underperformed the S&P 500's SPX 24% advance by the widest margin since 1998, according to Dow Jones Market Data.

By way of comparison, the tech-heavy S&P 500's communication-services sector XX:SP500.50 has popped 40% this year, while the information-technology sector XX:SP500.45 has gained 37.5% in the same period, according to FactSet data.