The S&P 500 delivered a 23.31% return in 2024, but the communications services sector stole the spotlight.

The Communication Services Select Sector SPDR Fund (NYSE:XLC), an exchange-traded fund designed to provide exposure to the communication services sector within the S&P 500, topped the leaderboard with a 33.24% gain.

It outpaced the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY), which was up 25.47%, and the Financial Select Sector SPDR Fund (NYSE:XLF), which boasts a 28.54% return.

Entertainment Heavyweights Powered Communication Services’ Surge

What powered this stunning performance? A trio of entertainment heavyweights: Netflix Inc (NASDAQ:NFLX), Meta Platforms Inc (NASDAQ:META) and Fox Corp (NASDAQ:FOX) (NASDAQ:FOXA).

• Netflix staged a blockbuster rally, skyrocketing over 83.07% as subscribers flocked to its ad-supported tiers.
• Meta Platforms with its AI-powered ad targeting and immersive VR rollouts, soared over 65.42%, cementing its dominance.
• Meanwhile, Fox Corp found a sweet spot in live sports and news, climbing 65.42% and 63.73%, respectively.

Live Nation Entertainment Inc (NYSE:LYV), though a smaller player, added its rhythm to the sector with a 38.35% gain, proving that live entertainment remains in demand.

Read Also: Netflix’s NFL Debut Brings Record Streams But Lags Traditional TV: Report

Communications Sector Outshines Tech, Broader Market S&P 500

While the S&P 500 made significant strides, the Communications Services sector outpaced even the vaunted Technology Select Sector SPDR Fund (NYSE:XLK) sector (20.80%).

Entertainment and digital engagement proved to be the year's golden tickets, with XLC leveraging the dual engines of streaming and advertising innovation.

As 2025 approaches, all eyes will be on whether Communications Services can keep the momentum going—or if another sector will step up to claim the crown.

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