RBC makes major S&P 500 sector shake-up, favors Tech over Utilities

RBC Capital Markets reshuffled its S&P 500 sector views, upgrading Technology to overweight and Consumer Discretionary to market weight while downgrading Communication Services and Utilities. The firm said Tech is hard to ignore because of its outsized weight in the S&P 500 and improving earnings revisions, revenue trends, inflows, and analyst outlooks. Utilities was cut due to expensive valuations, neutral outlooks, and weak fund flows. RBC kept its 12-month S&P 500 target at 8,150 and warned it is watching for a return to traditional mega-cap growth leadership. The move is broadly supportive for the index’s growth-heavy composition and suggests continued leadership from large-cap technology stocks, while defensive sectors may lag.