Equities and commodity ETFs are reflecting growing market conviction that a sustained commodities supercycle is beginning in 2026, with energy, materials, and mining sectors showing strong momentum. Key indicators point to structural shifts in global supply-demand dynamics.
- XLB up 18% YTD through January 2026, signaling strong materials sector momentum
- USO gains 24% in early 2026, pointing to tight global oil supply and rising demand
- SLV recorded $1.3 billion in inflows during Q4 2025, reflecting silver demand surge
- GLD holdings exceed 1,100 tons as of early 2026, indicating gold as a preferred hedge
- IWM rose 12% in Q1 2026, driven by small-cap miners and resource firms
- Market consensus now anticipates a multi-year commodities supercycle beginning in 2026
Financial markets are increasingly pricing in the onset of a new commodities supercycle starting in 2026, as asset classes tied to hard goods show elevated volatility and upward trends. The Materials Select Sector SPDR Fund (XLB), which tracks major industrial raw materials producers, has risen 18% year-to-date through January 2026, outperforming broader equity benchmarks. Similarly, the United States Oil Fund (USO), a benchmark for crude oil exposure, has posted a 24% gain over the same period, signaling heightened demand expectations amid tightening global supply. This shift reflects deeper structural changes: declining investment in exploration and mining infrastructure over the past decade has constrained future output, while emerging-market urbanization and green technology deployment are fueling surging demand for metals like copper, lithium, and nickel. Meanwhile, the iShares Silver Trust (SLV) has seen inflows totaling $1.3 billion in Q4 2025 alone, indicating rising institutional interest in physical precious metals as inflation hedges. Gold’s role remains critical too, with the SPDR Gold Trust (GLD) hitting record holdings exceeding 1,100 tons as of early 2026. The impact extends beyond commodities themselves. Small-cap stocks, represented by the iShares Russell 2000 ETF (IWM), have surged 12% in the first quarter of 2026—driven largely by sector rotation into resource-intensive industries. This suggests investors are reallocating capital toward companies positioned to benefit from higher input prices and tighter supply chains. Market participants now anticipate that this supercycle could persist through 2027 and beyond, potentially reshaping monetary policy decisions and prompting central banks to reassess inflation forecasts. If sustained, such a trend would mark a significant departure from the low-volatility regime of the prior decade.