Sector breakdown
Which sector has the biggest earnings reactions?
Information Technology, by a clear margin — S&P 500 tech names move an average of 5.9% (up or down) on their earnings-day gap, against an all-sector average of 3.8%. Utilities has the smallest reaction, at just 1.2%. That ranking says nothing about which direction a stock moves or whether the move continues afterward — only how large the initial reaction tends to be.
Average absolute earnings-day gap, by sector
Measured across 10,603S&P 500 earnings events from mid-2021 through mid-2026, using the same reaction-day detection and gap definition as the rest of this project (see the methodology).
| Sector | Mean |gap| | Median |gap| | Events |
|---|---|---|---|
| Information Technology | 5.92% | 4.50% | 1581 |
| Communication Services | 5.27% | 3.78% | 445 |
| Consumer Discretionary | 5.02% | 3.60% | 1199 |
| Health Care | 4.25% | 2.99% | 1283 |
| Consumer Staples | 3.79% | 2.61% | 745 |
| Industrials | 3.62% | 2.77% | 1611 |
| Materials | 3.14% | 2.11% | 549 |
| Financials | 2.75% | 1.98% | 1550 |
| Real Estate | 1.93% | 1.28% | 588 |
| Energy | 1.85% | 1.37% | 439 |
| Utilities | 1.20% | 0.86% | 613 |
Bigger doesn’t mean more tradeable
It’s tempting to assume the sectors with the largest reactions are also the ones where that reaction predicts something about the following days or weeks. This project tested that directly, segmenting forward returns by sector and re-benchmarking each one against its own sector ETF (not just the S&P 500) with the same out-of-sample bar used everywhere else on this site. Of 220 sector × bucket × horizon combinations, only 2 held up out-of-sample — about what you’d expect from chance alone. The size of the initial move and whether it’s a tradeable signal turned out to be two different questions with two different answers.
See the full sector breakdown
The findings page has the complete sector segmentation — SPY-adjusted, sector-matched, and out-of-sample views, plus the same test for market-cap tercile.
Read the findings →Common questions
Why does Information Technology gap the most?
This project only measures the size of the reaction, not its cause, so any explanation is an inference rather than a tested finding. Tech and Communication Services names tend to carry higher growth expectations and higher general volatility, which plausibly translates into a bigger repricing when a report confirms or challenges that story. Utilities and Real Estate sit at the other end, and both are rate-sensitive, slower-growth sectors where the day-to-day move is often driven more by interest-rate expectations than by any single earnings report.
Does a bigger reaction mean the sector is more predictable?
No — size and predictability are separate questions. This project also tested whether any sector's post-earnings move, big or small, continues or reverses in a way that survives a proper benchmark and an out-of-sample check. Of 220 sector × bucket × horizon combinations tested, only 2 held up — in line with the handful you'd expect from chance alone testing that many combinations. Real Estate's apparent pattern, for example, mostly disappeared once it was benchmarked against its own sector ETF instead of the S&P 500.
Should I expect a big move from a Utilities stock's next earnings report?
Historically, no — Utilities has had the smallest average earnings-day move of any sector in this dataset (1.20% absolute, versus 3.82% across the S&P 500 as a whole). That's a description of the past, not a guarantee; any individual report can still surprise.
Educational research, not advice. Past performance does not predict future results.