---
title: "Tesla And Amazon Just Became A Problem For The Entire Discretionary Sector"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/260080267.md"
description: "Tesla and Amazon's underperformance is dragging down the consumer discretionary sector in 2025, despite a strong economy. The Consumer Discretionary Select Sector SPDR Fund (XLY) has lagged behind the S&P 500, with both sectors underperforming significantly. However, much of the sector is performing well, as shown by the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD), which is up 9.2% year-to-date. This indicates that smaller and mid-sized companies are thriving, highlighting the importance of looking beyond major players like Tesla and Amazon."
datetime: "2025-10-06T16:48:37.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/260080267.md)
  - [en](https://longbridge.com/en/news/260080267.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/260080267.md)
---

> Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/260080267.md) | [繁體中文](https://longbridge.com/zh-HK/news/260080267.md)


# Tesla And Amazon Just Became A Problem For The Entire Discretionary Sector

When the economy is strong, consumer discretionary stocks usually sprint ahead. But in 2025, the sector's two heaviest runners—**Tesla Inc.** (NASDAQ:TSLA) and **Amazon.com Inc.** (NASDAQ:AMZN)—are slowing the entire race, masking a healthier picture underneath.

The **Consumer Discretionary Select Sector SPDR Fund** (NYSE:XLY), which tracks top U.S. companies in autos, retail and leisure, has badly trailed the S&P 500 this year.

Instead of capturing consumers' strong appetite for spending, backed by record-high U.S. asset prices and lower interest rates, the sector is underperforming the broader market by one of the widest margins seen in the past 15 years.

## Consumer Discretionary vs. Staples: An Unusual Market Picture

On social media platform X, **Liz Ann Sonders**, chief investment strategist at Charles Schwab, said both the consumer discretionary and staples sectors are the two worst-performing groups in the S&P 500, lagging the broader index by 12% and 11% year to date.

That kind of parallel weakness is rare: since 1996, the two sectors have moved in opposite directions in more than 70% of years.

“And even in years when they both lagged, they never both lagged by this much: in prior years, at least one of the two sectors limited its underperformance at under 6%,” she said.

## Not A Sectorwide Problem—Just Two Dormant Giants

The discretionary sector's exceptional underperformance might be less about consumer fatigue and more about stock concentration.

Two companies—**Amazon.com Inc.** and **Tesla Inc.** —account for 42% of the XLY ETF, each weighing in at roughly 21%.

Amazon's stock is flat in 2025, while Tesla is up just 6%, meaning nearly half of the ETF's exposure is tied to low or modest returns.

Their combined contribution to XLY's year-to-date gain is roughly 2 percentage points, far below expectations for a sector that should be thriving in a strong economy.

By comparison, the pair make up only 5% of the S&P 500's total weight, so their drag on the broader market is minimal—but devastating inside discretionary.

Out of 50 stocks in XLY, 33 are up year-to-date and 17 are down, indicating that much of the sector is quietly performing well.

## Equal Weight Tells A Stronger Story

If every stock in the consumer discretionary sector carried the same weight, investors would be seeing a far more upbeat picture.

The **Invesco S&P 500 Equal Weight Consumer Discretionary ETF** (NYSE:RSPD) is up 9.2% year to date, outperforming the cap-weighted XLY, which has gained only 7.7%.

This shows that beneath the surface, smaller and mid-sized companies in the discretionary sector are quietly delivering steadier, more broadly distributed gains than their larger peers.

In fact, the equal-weight version of the discretionary sector has performed almost in line with the broader market's equal-weight benchmark — the **Invesco S&P 500 Equal Weight ETF** (NYSE:RSP) — effectively erasing the sector's unusual 2025 underperformance once the dominance of Tesla and Amazon is stripped away.

Consumer discretionary stands out as one of the few sectors where equal-weight beats cap-weight, alongside energy and utilities.

Energy's equal-weight version outperformed by a stunning 7.6 percentage points, while utilities' equal-weight ETF edged out its cap-weighted rival by 0.8 points.

## The Bottom Line

Tesla and Amazon's sluggish performance has turned the consumer discretionary sector into an unexpected laggard in 2025.

But peel back their dominance, and the picture looks brighter: most companies in the sector are actually performing about as well as the broader market once they're given equal footing.

In a year when Big Tech continues to steer index performance, the strength of equal-weight ETFs in sectors like discretionary, energy and utilities serves as a reminder—sometimes, the real health of the market lies in its breadth, not its biggest names.

-   **Nvidia Is Now An AI Hedge Fund—But Goldman Says The Math May Not Work**  
    

_Photo: Shutterstock_

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