Industrials have been outperforming in the 2026 stock market, with the State Street Industrial Select Sector SPDR ETF (XLI) rallying more than 5% this year. Energy is the leading outperformer, with 37% and 14 of the top 20 stocks by market cap in the group higher this year, including GE Vernova (up 37%), Caterpillar (up 25%), and Lockheed Martin (up 26%). This success comes despite the S & P 500 being weakened by geopolitical risks and ongoing concerns in artificial intelligence and private credit. However, Trivariate Research found that further gains may be difficult for the sector due to its diverse industry.