The broad sentiment measures suggest investors are anxious. Take CNN’s “Fear and Greed Index,” which currently has people in “extreme fear” territory. Financial advisors and market participants are still trying to understand the impact of aggressive interest rate hikes by the Federal Reserve and aren’t sure what will happen after recent banking turmoil upset the markets.

If we looked more closely at the performance of separate industries in the S&P 500, what would they tell us about today’s climate?

Before we examine exchange-traded funds tied to S&P 500 industry sectors, it’s worth noting that only the Dow Jones Industrial Average has fallen so far in 2023—and its loss is a modest one at that, a mere 3.98%. Both the S&P 500 and Nasdaq-100 are still up as of right now.

The two top-performing sector ETFs derived from the S&P index are the Communication Services Select Sector SPDR fund (XLC) and the Technology Select Sector SPDR fund (XLK). Both have scored impressive double-digit gains of just over 12% year to date.

Another strong performer is the Consumer Discretionary Sector SPDR fund (XLY), which has scored 8.7% so far in 2023.

What’s more interesting is that all three of these sectors suffered sharp losses in 2022, so all of this year’s gains could be the result of a short-term bounce rather than a sustained upward trend. But the waning performance of other industry sectors seems to be hinting at the latter scenario.

In January, eight out of the S&P 500’s 11 industry sectors scored positive results. As of March, only four of them have. So the gainers are falling away. Again, that likely makes it more difficult for investors to feel a sense of equilibrium.

The three industry groups with the worst performance are the Energy Select Sector SPDR fund (XLE), the Financial Select Sector SPDR fund (XLF) and the Health Care Select Sector SPDR fund (XLV).

The Financial Select fund in particular was stung by panic in the banking sector following the recent collapse of two high-profile institutions: Silicon Valley Bank, which suffered $16 billion in unrealized losses in its bond portfolio amid surging bond yields, and Signature Bank, whose woes were tied to crypto. Banks and consumer finance companies make up almost 40% of the portfolio in the Financial Select Sector fund, and the sharp pullback in bank share prices has pushed down the fund’s performance.

We also have funds whose performance is more ambiguous. The Real Estate Select Sector SPDR fund (XLRE) has swung between positive and negative performance this year and currently sits on a gain of less than 1%. After falling just over 26% last year, the fund has been surprisingly resilient this year, despite tighter credit conditions.

And then there are sector ETFs in more defensive industries, the Consumer Staples Select Sector SPDR fund (XLP) and the Utilities Select Sector SPDR fund (XLU), which have endured only modest losses of 3% to 5% in 2023.

After the chaos in the banking sector, Goldman Sachs has suggested that the Fed will pause rate increases (according to a CNBC report). But the overriding consensus on Wall Street is that the Fed will go ahead and lift rates by 0.25% at its March 21-22 meeting.

Compared with last year, the S&P 500 sector performance in 2023 is a mixed bag. Whether other industry groups will be able to follow the lead of stocks in the communication services, consumer discretionary and technology sectors remains to be seen.

*Performance figures are through March 15, 2023.