"Consumer staples underperformed in a big way in 2025 but may see a more favorable environment in 2026 with easing sector-specific pressures and fiscal stimulus potentially boosting demand. The sector has a 70-percentage-point performance gap relative to tech stocks over the past three years, suggesting a contrarian opportunity for long-term investors. The top stocks in the industry offer defensive qualities during economic uncertainty while providing steady dividends."
"Over the past three years, the S&P 500 has produced double-digit returns. While many investors are overjoyed to see their brokerage statements rise seemingly every month, the reality is that at some point, something has to give. Investors do not have to go that far back to remember that in 2025, from February to early April, we saw a steep correction and at one point an intraday bear market, which denotes a 20% decline in an index."
"The Consumer Staples exchange-traded fund ( NYSEArca: XLP) has gained 7.5% in just six trading days to start the year. According to BTIG, it is the strongest short-term run since 2022. Three to four weeks later, returns were positive in every instance, except during the 2000 tech bubble and the 2008 financial crisis, when the market was melting down."
Consumer staples underperformed in 2025 but may see improvement in 2026 as easing sector-specific pressures and fiscal stimulus potentially boost demand. The sector lagged technology by about 70 percentage points over the past three years, creating a contrarian opportunity for long-term investors. Leading consumer staples stocks offer defensive qualities during economic uncertainty while delivering steady dividends, making them suitable for conservative growth and income investors. The Consumer Staples ETF XLP rallied 7.5% in the first six trading days of 2026, marking the strongest short-term run since 2022 according to BTIG. Historically, similar short-term runs produced positive returns three to four weeks later except in severe market crises.
Read at 24/7 Wall St.
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