Over the last year, both consumer discretionary and consumer staples sectors have weakened on a relative basis compared with the broad equity market. This decline has persisted despite only a short-lived improvement in staples performance around the early phase of the Iran War, after which the broader downtrend resumed.
Historically, durable equity bull markets have typically featured at least one consumer segment, often discretionary, either outperforming or at least holding steady versus the index. Prolonged relative weakness in both consumer groups has been less common during robust bull phases and has more often aligned with periods when index gains were narrower and less broadly supported. The relationship is conditional, not deterministic, but it points to a market backdrop where ongoing strength in the headline index may be more vulnerable if this pattern persists.
Exchange traded funds such as the Consumer Discretionary Select Sector SPDR Fund (XLY) and Consumer Staples Select Sector SPDR Fund (XLP) capture these trends at the sector level. Large constituents of these sectors, including Amazon.com (AMZN), Home Depot (HD), McDonald’s (MCD), and Procter & Gamble (PG), are important drivers of the aggregate performance profile, but the analytical signal in this framework comes from the sectors’ relative behavior rather than any single stock outcome.