Different sectors lead at different points: technology and consumer discretionary in early expansions, energy and materials late, utilities and staples in slowdowns. Rate changes matter too: rising rates hurt long-duration growth stocks and help banks.
Traders track sector etfs relative to the index to see where strength is. A stock in a leading sector has a tailwind; the same chart in a lagging sector does not.
Example: over a month the semiconductor ETF is up 9% while the S&P is up 2% and utilities are down 3%. Rotation favors semis.
Related: etf, index, risk-on-risk-off, correlation