Cracks Appear Under the S&P 500’s Champagne Toast

The S&P 500 has been popping champagne this year, but its household names aren’t celebrating. The index is up 15.8%, with tech stocks soaring 27%, yet S&P’s consumer discretionary index remains flat without AmazonAMZN

and TeslaTSLA

. That’s worrisome, because two-thirds of America’s economy depends on Main Street’s spending, and these foundational cracks are getting harder to ignore.

• LululemonLULU
  , ChipotleCMG
  , and DeckersDECK
  have lost up to 60% this year — while HormelHRL
  and TargetTGT
  are down at least 31%.
• Profits across the sector have slumped, leading just 5% of consumer staples stocks to outperform the S&P 500 this year — one of the weakest showings in half a century.

Wild card: Wall Street’s calling this the “barbell” market, where AI giants sprint as layoffs, mortgage woes, and tariffs weigh down the rest. Still, analysts warn that a new wave of consumer belt-tightening or layoffs could spook investors, dragging down sentiment. But in a twist, some strategists predict more job cuts could push the Fed to loosen policy, juicing stocks in a so-called “jobless boom.” For now, all eyes are on the coming earnings from McDonald’sMCD

, DoorDashDASH

, and WalmartWMT

.