Consumer stocks have been conspicuously absent from the market’s latest move to record highs. The S & P 500 is up 0.4% in October alone and touched a new intraday all-time high on Tuesday. But the consumer discretionary sector, as measured by the XLY ETF , isn’t doing as well. The XLY is down nearly 2% in October, with most of its components struggling. Home Depot has fallen more than 4% month to date, while General Motors has shed 6.1%. Starbucks , Williams-Sonoma and Booking Holdings have dropped more than 3% each. “Near-term and intermediate-term technical trends remain bullish for U.S. Equities, but a few sectors have started to weaken lately, making it right to be more vigilant,” wrote Mark Newton, technical strategist at Fundstrat. “Additional weakness looks possible over the next week before a bounce, but increasingly, it looks like ‘Discretionary’ could have peaked in early September and is beginning a Fall correction,” he said. “While I remain technically Overweight ‘Discretionary,’ a failure to rally back in the weeks to come would warrant a possible downgrade to Neutral, technically.” XLY .SPX mountain 2025-10-01 SPX vs XLY in October The weakness comes during a strange time for consumers and investors. The U.S. government closed last week after lawmakers failed to reach a funding deal. That’s led to the delay of key economic data, including the monthly jobs report. And while the labor market and the U.S. consumer had been resilient ahead of the shutdown, cracks were also emerging. “Our payroll estimates – based on customer accounts receiving direct deposits – point to a continued slowdown in the pace of job growth in September,” the Bank of America Institute wrote Tuesday. “The year-over-year (YoY) growth rate for payrolls increased by only 0.5%, the slowest pace we’ve seen in months. Meanwhile, unemployment insurance payments into customer accounts are up around 10% YoY, hinting at rising jobless claims.” The Carlyle Group also put out an analysis this week that showed employment growth essentially flat in September . Bottom line: The weakness in consumer stocks may be hinting that the broader market could be in trouble. A lot hinges on personal expenditures for goods and services. After all, consumer spending makes up roughly two-thirds of U.S. economic activity. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
