Consumer Discretionary Select Sector SPDR Fund Price & Performance (XLY)

The University of Michigan Consumer Sentiment Index dropped to 64.7 in February, marking a 15-month low, while the Conference Board Consumer Confidence Index fell to 98.3, its steepest decline since 2021. Economists point to inflation and labor market concerns as key drivers of the declining consumer sentiment.1

Consumer staples stocks have outperformed consumer discretionary stocks in recent weeks, reflecting a shift in spending toward necessities. The Staples Select SPDR Fund gained 4.3%, while the Discretionary Select Sector Fund dropped 10.6%. This trend underscores cautious consumer behavior as economic conditions remain uncertain.2

The NFIB Small Business Optimism Index fell to 100.7 in February, marking its second consecutive monthly decline. Concerns over inflation and labor quality are growing, with fewer business owners believing conditions will improve in the next six months. This reflects broader economic challenges faced by U.S. businesses.3