The overall stock market performance has been pretty impressive so far in 2019. After the huge selloff in the fourth quarter of 2018, stocks turned in an impressive performance through the first four months, but then we saw a little pullback in May. Over the last few weeks, we have seen the overall market bounce back again.

If we look at the 1o main sector SPDRs, we see that the tech sector has led the others with a gain of 23.9% while the healthcare and energy sectors have lagged the others with gains of 6.24% and 6.67%, respectively. The S&P itself is up 14.88%, and we see how the bulk of sectors are lumped together between 14% and 18% gains.

If we break it down to what has happened since the beginning of May, we get a very different picture. Over the last month and a half, the healthcare sector has led the way with a gain of 2.59%, and it is joined in positive territory by the utilities sector, consumer staples, and materials. The other six sectors are all in negative territory since May 1.

Utilities and staples are considered defensive sectors, and even healthcare is to some degree. The materials sector is different and has really jumped since the beginning of June.

There are several takeaways from this sector rotation. First, the increased tension in the trade war between the U.S. and China caused investors to become more cautious about their stock selection. Secondly, the increased calls for an interest rate cut from the Fed has caused treasury rates to fall and this makes dividend paying stocks more attractive—utilities and consumer staples are among the top dividend paying sectors along with real estate.

Seeing how the sectors performed in the first four months of the year versus how they have performed in the last month and a half, it is a reminder that the market can move higher under different scenarios. The utilities sector and the consumer staples sectors are represented in the S&P 500 and can help push the index higher just as easily as the tech sector or the consumer discretionary sector.

If you just look at the indices, you might assume that a gain on any given day would mean a “risk on” day, but if the riskier sectors are unchanged and the defensive sectors move higher, the S&P would still move higher, but it isn’t really a sign that investors have an increased appetite for riskier stocks.

The uncertainty surrounding the trade picture is still a factor, and that will likely be the case for the foreseeable future. Even if a deal is reached between the U.S. and China, you will still have possible tensions between the U.S. and Europe as well as Japan. There is also the matter of the Fed and what steps it takes with regard to interest rates. A rate cut would probably help almost all sectors, but the dividend-oriented sectors may see a bigger boost than some of the other sectors.

I encourage investors to keep an eye on the sector performance as well as the overall market. By doing so, you can get a feel for what other investors are thinking with regard to risk. If the indices move higher with tech, consumer discretionary, and industrials leading the way—it is a sign that investors are increasing the risk in their portfolios. If the indices move higher, but utilities and consumer staples lead the way, it is a more cautious environment.