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Tech Sector Shines: RBC Upgrades S&P 500's Top Growth Engine
13 Jul
Summary
- Technology sector upgraded to overweight, favored for growth.
- Communication Services downgraded due to weak EPS revisions.
- Utilities sector cut to underweight due to high valuations.
As of July 2026, RBC Capital Markets has adjusted its S&P 500 sector ratings, designating Technology as its preferred growth sector for the remainder of the year. The firm upgraded the Technology sector to overweight, citing strong upward trends in earnings per share (EPS) and revenue revisions, along with recovering investor inflows.
Alongside this, Consumer Discretionary was elevated to market weight from underweight, indicating a stabilization in sentiment for consumer-focused sectors. However, Communication Services was downgraded to market weight due to emerging weakness in EPS revisions and a negative performance outlook.
Utilities experienced a downgrade to underweight. RBC pointed to the sector's high valuations within the S&P 500, a neutral analyst outlook, and recent weak fund flows as reasons for this decision. RBC maintained its 12-month S&P 500 price target of 8,150.
