Cyclical stocks tend to move in tandem with the state of an economy, rising during an expansionary phase and falling upon contraction. When the economy is doing well, both companies and consumers will be more willing
to spend on non-essential items; for consumers it may be a new car or house while companies may acquire additional equipment and/or set up new businesses.
Energy, basic materials, technology, financials, industrials, consumer discretionary are examples of cyclical sectors.