Consumers Staples Select Sector SPDR Fund

XLP

Market cap $15.5B

Wall Street warns of an AI equity bubble as mega-cap tech surges, prompting investors to diversify into ETFs for balanced growth.

CNBC's "Fast Money" team detail their final trades.

As AI-fueled gains spark bubble warnings, investors are eyeing defensive ETFs in consumer staples, utilities and healthcare for safety.

As the U.S. government shutdown deepens economic uncertainty, investors may turn to consumer staples ETFs like XLP, FTXG and PBJ for stability.

The US stock market is highly concentrated, with technology and tech-related stocks now comprising about 55% of total market cap. This concentration justifies higher valuation multiples for SPY, as tech companies have stronger margins and more stable earnings than defensive sectors. There is a stark divergence in performance between speculative tech ETFs like ARKK and CHAT versus defensive dividend ETFs such as SCHD and VNQ.

Consumer Staples Select Sector SPDR Fund stands out as a defensive play amid clear signs of a slowing U.S. economy and rising unemployment. XLP's holdings - Procter & Gamble, Coca-Cola, PepsiCo, Costco, and Walmart - thrive as consumers shift spending from discretionary items to everyday essentials during downturns. Staples companies in XLP offer resilience through pricing power, steady demand, and reliable dividends.

Market risks are mounting, prompting investors to seek stability and protection through defensive ETFs.

Kevin Green urges investors to watch any and all inflation and labor commentary throughout the week into Friday's PCE print. He expects data and comments from Fed speakers to drive market moves.

Market volatility and outflows push investors toward defensive ETFs, with staples, value and quality funds offering protection and stability.

Launched on December 16, 1998, the Consumer Staples Select Sector SPDR ETF (XLP) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Staples - Broad segment of the equity market.