State Street Consumer Discretionary Select Sector SPDR ETF

XLY

Market cap $24.8B

CNBC's Courtney Reagan joins 'The Exchange' to report on 2025's biggest retail losers and winners, the resilience of the consumer and more.

Gerald, Storch, Fmr. Hudson's Bay CEO, Former Toys R Us Chairman & CEO, Fmr.

Softer inflation and dovish signals point to more 2026 rate cuts. These ETFs can help investors ride potential gains.

Why I Think XLY And XLC Stand Out Over Tech In 2026

Consumer services are notably undervalued by 15% versus 11-year averages and exhibit strong quality metrics, while retailing and auto/components are overvalued by 20%–23%. Despite recent underperformance, XLY has outperformed the S&P 500 long-term, with higher volatility and similar risk-adjusted returns. All capital-weighted ETFs in the sector have significant exposure to Amazon and Tesla, raising concentration risk.

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

The economic narrative last week was dominated by a mix of cooling inflation and a softening labor market. The ADP employment report signaled a continued slowdown by showing a surprise drop in private sector jobs, while the Fed's preferred inflation gauge offered minor relief by unexpectedly inching lower.

State Street Investment Management (SSIM) has been the investment advisor for the Select Sector SPDR ETFs since 1998. It will now take over the distribution and marketing for these funds.

XLK and other sector ETFs set to gain as expectations surge for a potential Federal Reserve rate cut in December.

Last week's economic landscape was defined by conflicting signals from key indicators, suggesting a growing divergence between investor behavior and underlying consumer health. Margin debt surged to a new high while consumer confidence simultaneously fell to near-historic lows.