New York, Jan 24, 2026, 12:56 PM ET — Market closed.
- Shares in consumer cyclical sectors closed the week a touch up, following a choppy period in U.S. markets.
- Amazon and Tesla, XLY’s top two holdings, continue to dominate its performance.
- Midweek brings the next hurdle: the Fed’s policy announcement and Tesla’s earnings report.
The Consumer Discretionary Select Sector SPDR Fund (XLY), a key gauge for consumer cyclical stocks, ticked up 0.4% on Friday to finish at $123.13. That puts the fund roughly 0.7% higher for the week.
This matters since the group usually reacts quickly to shifts in expectations around U.S. growth and interest rates. When concerns over borrowing costs or consumer demand rise, these stocks are often the first to shift.
XLY is notably concentrated. Amazon and Tesla alone account for just over 40% of the fund. Following them are Home Depot, McDonald’s, Booking Holdings, and Starbucks among the biggest holdings.
The broader market closed Friday on a mixed note: the Dow dropped 0.58%, the S&P 500 held steady, and the Nasdaq ticked up 0.28%, following a week rattled by tariff news and risk-off moves. Intel plunged 17% after issuing a gloomy forecast, while big tech names like Amazon gained ground. One portfolio manager described the mood as a “show-me” phase ahead of earnings. Reuters
Late-week economic data offered little new direction for the sector. S&P Global’s flash U.S. composite PMI, an early gauge of business activity, remained in expansion mode for January. At the same time, the University of Michigan survey noted a rise in consumer sentiment, Reuters reported.
Valuations have upped the ante for the week ahead. FactSet put the S&P 500’s forward 12-month price-to-earnings ratio at 22.1, topping both its five- and 10-year averages. The firm also noted that 103 S&P 500 companies are set to report earnings this week. Consumer discretionary stood out as one of the sectors showing a year-over-year drop in earnings so far this season.
Reuters noted in a separate Week Ahead report that investors might shift focus from the Greenland tariff scare to earnings and the Fed’s interest rate outlook, with the central bank expected to keep rates unchanged on Wednesday. PNC’s Yung‑Yu Ma described recent sessions as a “short but steep roller-coaster ride.” Meanwhile, Franklin Templeton’s Chris Galipeau emphasized that “earnings are the driver” given current high valuations. Reuters
The calendar is packed. The Federal Reserve’s January timetable pins the two-day FOMC meeting on Jan. 27–28, with the policy statement dropping at 2:00 p.m. ET and Chair Jerome Powell’s press conference following at 2:30 p.m. ET on Jan. 28.
Tesla’s investor relations page pins Jan. 28 as the date for its quarterly earnings, slotting the major consumer-cyclicals player right in the thick of the Fed’s session.
But the flip side is clear. A return of tariff threats, a hawkish Fed pivot, or disappointing forecasts from key bellwethers could send the sector tumbling fast—especially since XLY’s gains hinge heavily on a handful of big names.
Looking ahead to the next session and the week, traders are zeroed in on two key questions: will the Fed stick to its soft-landing narrative on Jan. 28, and can Tesla’s report that day justify the sector’s premium valuations?
