Sectoral Sensitivities to US GDP Fluctuations: A Focus on the S&P 500 Index

Abstract

The U.S. GDP is a critical economic indicator reflecting the nation's economic health, and its fluctuations significantly influence financial markets. Among these markets, the S&P 500 Index, a barometer of the U.S. equity market, demonstrates varying levels of sensitivity across its sectors to GDP changes. This paper investigates sectoral sensitivities to U.S. GDP fluctuations, offering a detailed analysis of their correlation and causality. By leveraging historical data, econometric models, and sector-specific metrics, this research provides insights into how GDP changes impact the S&P 500 sectors differently. The findings highlight significant variations in sectoral responses, emphasizing the need for targeted investment strategies and economic policy considerations.