06/03/2026
The chart shown highlights the deepening underperformance of consumer stocks against a resilient broader market. The equal-weighted U.S. consumer discretionary index relative to the S&P 500 has collapsed 42% since 2021, falling to 0.07 and breaking below both the 2020 and 2008 lows. Over that same period, the S&P 500 is up 60% while the equal-weighted consumer discretionary index gained just 6%.
U.S. Consumer Sentiment fell to an all-time low of 44.8 in May, yet the S&P 500 is up 17% since March 30th. With discretionary stocks at a 20-year relative low, sentiment at an all-time low, and the ratio breaking below crisis-era floors, the data points to a consumer under genuine stress. The question is whether this is a leading indicator for broader market weakness or simply a reflection of a bifurcated economy where high-income households drive equity gains while lower-income consumers retrench.
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