US Machinery: September Marketing Deck

Citi's September Marketing Deck for US Machinery reviews the sector and its sub-sectors. Machinery stocks have consistently outperformed the XLI and S&P 500 YTD in 2026, with data center-exposed names leading, though they have given back some gains recently on headline risk that Citi views as overblown and a good dip-buying opportunity. Sub-sector performance is mixed: Ag is the clear outperformer on improving grain prices and greater confidence in 2026 marking trough demand; Construction is strong on the data center/mega project theme; Commercial Vehicles have lagged despite improving demand. Key themes: the data center & mega project theme remains in relatively early days, with ~80% of mega projects yet to start, and URI and CAT seen as outsized beneficiaries; a constructive outlook for construction and mining equipment demand in 2026-2028, with global mining equipment sales volume growing ~HSD% in 2026-2028;