State Street Consumer Staples Select Sector SPDR ETF

XLP

Market cap $16.7B

With U.S. budget deficits and already elevated debt, the ongoing Middle East war could worsen the fiscal outlook, making defensive ETF strategies worth considering for stability.

Looking for broad exposure to the Consumer Staples - Broad segment of the equity market? You should consider the State Street Consumer Staples Select Sector SPDR ETF (XLP), a passively managed exchange traded fund launched on December 16, 1998.

Nik Modi, RBC Capital Markets co-head of global consumer and retail research, joins 'The Exchange' to discuss if food prices will move higher, which companies are most vulnerable and much more.

Middle East tensions and Strait of Hormuz disruptions lift volatility and oil risks, pushing investors toward hedges like volatility, gold and consumer staples ETFs.

Oil above $110 amid Middle East conflict is rattling markets. Here are ETF strategies -- from dividends and defensives to commodities -- that could help navigate the volatility.

The alcohol industry faces secular decline as Gen Z sharply reduces consumption, impacting global sales volumes and market valuations. Major players like Anheuser-Busch InBev report volume declines across key markets, with $830 billion in sector value lost since 2021.

Market sentiment appears overly defensive in certain areas, suggesting potential mispricing in risk assets. The analysis highlights top-tier BDCs, focusing on dividend yields, price/NAV, leverage, and credit quality. Main Street Capital (MAIN), Capital Southwest (CSWC), and Ares Capital (ARCC) offer strong yields with varying risk profiles.

Consumer staples stocks enter 2026 with deeply reset expectations, compressed valuations, and high short interest, creating an asymmetric risk/reward setup. Sector earnings estimates and guidance have been cut for two years, with 2026 forecasts now extremely modest and management teams aiming to avoid further downgrades. Policy support via tax refunds and the 2026 FIFA World Cup are likely to provide incremental demand, especially in food, beverages, and household staples.

Sector investing — it's a typical strategy for advisors if their clients are looking beyond broad market exposure by targeting a specific sector. The concept is fairly straightforward, but implementing the strategy is not as simple as it sounds.

Consumer staples stocks have gotten off to their best start to a calendar year this century in 2026. But that means the sector is trading at a price-to-earnings multiple higher than it's been in nearly 30 years.