Do consumer stocks’ mean we’re in a bear market?
Last week, the Nasdaq registered its full weekly performance since April. Much of the sell-off was created by concern over historical highs, the emergence of the AI Bubble and heightened market concentration.
Since the end of the last bull market in October 2022, the S & P 500 has been led by the biggest gains in Tech and Communication Services – The sectors that are home to the five best companies, many of which experienced significant losses in sales last week.
Those volatile sectors aside, some pundits are now worried about consumer stocks. While companies with exposure to AI are at the top, stocks of many types operating at critical corners in market prices have now posted losses that exceed streakbacks and corrections.
“Anything that focuses on the consumer seems to have entered the territory of the temple market,” investment personality and former fund manager Jim Cramer sent on November 4 to X.
Big Tech’s profits are getting overstocked
In 2023 and 2024, the two best-performing sectors of the S & P 500’s – Tech and Communication Services – finished ahead of the other nine sectors with an average annual return of 47.6%.
In 2025, little has changed. Tech’s year-to-date profit is 22.3%, while communication services’ is 24.5%. Overall, the S & P 500 rose 14.81%. Those gains are lower than two years ago, but analysts say they generally believe the current bull market can carry through 2026 before facing a significant correction.
“[The AI trade] “He’s in really good shape,” Tom Lee, managing partner at Femstrat Global Advisors, told CNBC on Monday. There’s a lot of money to be seen in AI… and there’s still a payoff to come. “
Whether AI’s highly-acquired stocks are overstated from valuation exposure remains debatable. Anyway, they did well this year. For example, for example, it is 129% despite recent sales.
But those great forces are hidden in the factors that are not under the market – in particular, consumer stocks, which tell a different story.
Consumer stocks are pulling back
Consumer Staples (products and services essential to everyday life) and consumer discretionary stocks (specialized goods and services) have historically had a different relationship. The former tends to do well during economic downturns, while the former tends to do well during periods of economic growth.
This was the case in the first half of 2025, which led to the consumer’s portfolio showing an even 1.28% gain. Consumer choice increased by 4.61%, which – to some extent – can be attributed to the actions mentioned in just two stocks.
Amazon and Tesla – two very good members of that seven he is not In technology and communications – they fall under the umbrella of consumer literacy. Both have performed well since their mid-years, with Amazon up 42% from April and Tesla up 81% from April.
But those two stocks make up about 45% of the sector’s weight, leaving 55% of the other 48 consumer study stocks. That can be done by performance results. Removing Amazon and Tesla from the equation, there is a trailing loss in the entire sector, especially when you zoom in on specific industries.
Consumer stocks, especially in the discretionary space, are considered a lwther in the economy as they are sensitive to consumer spending habits.
When spending decreases, it can negatively affect these corners of the market. And that is what is happening now.
“If you look at the sector broadly, it’s flat,” said David Lundgren, of the Small Refugee Market. “But the laggards were in the aptha, rings and stores.”
Corners are critical with market prices struggling
Durable goods, including refrigerators, dishwashers, washing machines and ovens, have been hit hard by the President’s aggressive tariffs. That has impacted the stocks of companies like Whirlpool, which are down 50% year-to-date.
Furniture is another pain point for durable goods: LA-Z-Boy is down 36% from its peak earlier this year.
Lundgren says: “The consumer sector showed the second largest percentage of underperforming incomes. “This combination of good earnings and mediocre stock price performance suggests that the sector will perform poorly. [the fourth quarter]. “
Clothing has also faced taxes. Nike and Adidas are down 20% and 30%, respectively, from their 2025 positions, while Abercrombie & Fitch is down 56%.
Then there are hobby stocks. Year-to-date, Royal Caribbean is down 30%, Wyndham hotels and resorts are down 35%, and US flags are down 50% this year.
It’s not much of a rosier sale, either. Petco is down 30% from high, peloton is down 28%, flooring & trim is down 42% and outdoor deckers are down 63%. The usual fast food places also feel a little bit. Shake Shack is down 36% from this year’s high, while Chicotle is down 47%.
That’s why diversity is important. Investors who tolerate losses in consumer-savvy stocks won’t feel much pain if they sort their portfolios accordingly.
“It is preferred that consumer stocks participate in – if not lead – the bull market,” said Lundgren. “But the most important thing is that the leadership still has to maintain circulation, the growth of Pro-Rible in it.”
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