When Market Swings Diverge: Which Sectors Win in S&P 500 Volatility?

The S&P 500 is experiencing a pivotal moment. With the CBOE Volatility Index bouncing between 23 and 27 throughout late November 2025, market participants are witnessing the kind of uncertainty that typically separates winners from losers across different industries. History suggests these volatile periods often precede meaningful rallies, as panicked selling creates strategic entry points for disciplined investors.

The Hidden Risk: Digital Asset Exposure and Index Rebalancing

One of the most pressing concerns threatening market stability involves potential changes to major stock indexes. MicroStrategy (MSTR), valued at $52 billion as the largest digital asset-focused company, faces a potential headwind. Should MSCI decide to exclude it from its indexes in January 2026, a $2.8 billion sell-off could follow, primarily affecting passive investment funds that hold substantial positions. According to JP Morgan’s analysis, this move would strip away the indirect Bitcoin exposure that has historically underpinned MSTR’s valuation, potentially reshaping how investors perceive cryptocurrency-linked stocks.

The Sector Split: Where Volatility Creates Winners and Losers

Market turbulence doesn’t impact all companies equally—it diverges dramatically across sectors. Consider the contrasting trajectories of two transportation-focused firms. FTAI Aviation received an upgrade to ‘BB’ status from S&P Global Ratings, thanks to operational excellence that shines during uncertain times. The company’s maintenance and repair division has strengthened its financial position, with debt-to-EBITDA improving to approximately 3x. Meanwhile, Sabre Corp. faces the opposite trajectory—its outlook was revised to negative, weighed down by anemic earnings and elevated borrowing costs that become liabilities when markets tighten.

Energy’s Steady Hand in Volatile Markets

Large-cap energy companies continue to anchor the broader market during turbulent periods. Saudi Aramco ($1.69 trillion market cap) and ExxonMobil ($492 billion) remain crucial drivers for the S&P 500’s direction. Their cash generation capabilities—rooted in global energy demand and commodity pricing—provide a stabilizing force regardless of regulatory headwinds. This resilience explains why energy consistently outperforms during volatility cycles.

The Rebound Play: Which Sectors Offer Value Now

As volatility persists, forward-thinking investors are identifying potential opportunities. Jacobs Solutions (J) specializes in capital-intensive infrastructure and energy sectors, presenting an attractive valuation proposition amid anticipated government stimulus initiatives. Similarly, Verisk Analytics is signaling measured optimism through insider buying activity and updated dividend strategies, suggesting management sees value despite near-term uncertainty.

The Volatility Thesis: Short-Term Pain, Long-Term Gains

The divergence between sectors ultimately reflects a deeper market dynamic. While near-term instability persists, volatility historically has set the stage for market consolidation and subsequent growth periods. The S&P 500’s ability to navigate index composition shifts, sector-specific headwinds, and macroeconomic variables will determine whether this volatility resolves into a sustainable advance. Companies with fortress-like balance sheets and steady cash flows are positioned to thrive when uncertainty finally recedes.