What the sectors of the US stock market cost

Each sector has a P/E ratio: its price divided by the earnings expected over the next 12 months. 📊 The chart also gives four scores from 0 to 100. They show how expensive a sector is compared with its own history and with the wider market. A score of 100 is the most expensive it has been over the period shown; 0 is the cheapest.

Industrials trade at 23 times earnings and are close to their historical high. 🏭 Relative to the rest of the market, they score 97 out of 100 over thirty years. Investors are paying for the expansion of factories, defence and power grids. Healthcare and consumer staples usually trade at lower valuations, but both now cost more than is typical for them.

At the other end is communications—the sector covering telecoms, internet and media. It trades at 18 times earnings, scoring 22 out of 100 against its own history and just 9 against the wider market. 📉 No sector looks cheaper relative to the rest. Energy has the lowest P/E of all, at 14, but sits around the middle of its historical range. It has generally traded cheaply, so a low P/E does not necessarily make it a bargain.

Technology, often described as expensive, sits in the middle. 💻 It trades at 20 times earnings, scoring 44 out of 100 against its own history and 54 relative to the market. The US market overall trades at 19 times expected earnings and scores 71 out of 100 over thirty years: above average, but below its highs.

Our view: a low P/E alone does not signal an opportunity. What matters is how a sector’s price compares with its history—and whether the expected earnings actually arrive. 🧭 Investors with a large industrial allocation are paying a relative price seen only rarely over the past thirty years.