--- title: "U.S. stocks \"lost camp\" consumer stocks face a \"big test\" of earnings reports as American families are under \"immense pressure,\" which is the root cause" type: "News" locale: "en" url: "https://longbridge.com/en/news/264450305.md" description: "In 2025, the US stock market set multiple records, but consumer goods stocks performed poorly. This week, several large consumer companies will release their earnings reports, and investors face more shocks. Retailers in clothing, dining, and footwear, such as Lululemon and Chipotle, saw declines of over 45%. Essential consumer goods retailers like Procter & Gamble and Hormel Foods also lagged behind. American households are facing multiple challenges, including layoffs, tariff policies, and high mortgage rates. Companies like McDonald's will release their earnings reports, and investors are eager to understand the dynamics of the consumer sector. Walmart's earnings report will be announced on November 20" datetime: "2025-11-05T13:34:14.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/264450305.md) - [en](https://longbridge.com/en/news/264450305.md) - [zh-HK](https://longbridge.com/zh-HK/news/264450305.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/264450305.md) | [繁體中文](https://longbridge.com/zh-HK/news/264450305.md) # U.S. stocks "lost camp" consumer stocks face a "big test" of earnings reports as American families are under "immense pressure," which is the root cause According to the Zhitong Finance APP, the stock market set multiple records in 2025, but consumer goods stocks lagged far behind and did not participate in this feast. This week, several large consumer companies will successively release their financial reports, while investors are preparing for more shocks. Apparel manufacturers, restaurant operators, and footwear retailers have performed poorly, with Lululemon Athletica (LULU.US), Mexican fast-food chain Chipotle (CMG.US), and Deckers Outdoor (DECK.US) all down more than 45% this year. Essential consumer goods retailers, such as grocery, alcoholic beverages, and toilet paper sellers, have also lagged, with Pilgrim's Pride-A (BF.A.US), Hormel Foods (HRL.US), and Target (TGT.US) down at least 27%. If we exclude Amazon (AMZN.US) and Tesla (TSLA.US) from the S&P 500 sub-index tracking non-essential consumer goods companies, the index's performance in 2025 is basically flat. According to S&P Global's classification system, these two tech giants are categorized as consumer companies, but most market observers believe that their recent stock price movements are primarily driven by the prospects of artificial intelligence (AI). ## The Weakness of Consumer Stocks Highlights Pressure on American Households The poor performance of many consumer companies' stock prices highlights the multiple challenges facing American households. In recent months, companies have continued to lay off workers, leading to a weakening labor market; the tariff policies implemented by the Donald Trump administration have kept prices of food, clothing, and electronics high; at the same time, elevated mortgage rates have also impacted the real estate market. This week, companies such as McDonald's (MCD.US), delivery platform DoorDash (DASH.US), and Wynn Resorts (WYNN.US) are successively releasing their financial reports, and investors expect to gain insights into the latest dynamics of the consumer sector through these reports. One of the bellwether companies in this sector, Walmart (WMT.US), will not disclose its financial report until about two weeks later—on November 20. On Wednesday before the market opened, McDonald's announced its third-quarter financial report, with revenue and adjusted earnings per share both falling short of market expectations, but global same-store sales growth exceeded market expectations. Data shows that Q3 2025 revenue was $7.08 billion, with market expectations at $7.095 billion, compared to $6.87 billion in the same period last year; global same-store sales increased by 3.6%, higher than the market estimate of 3.55%; net profit was $2.28 billion, with earnings per share of $3.18. ## The AI Boom Masks the Predicament of Consumer Stocks, Market Shows "Barbell" Divergence So far, the hot AI trading boom has been enough to mask the increasingly severe predicament of consumer stocks. The S&P 500 index is currently close to historical highs, with a 15% increase this year. Michael O’Rourke, chief market strategist at JonesTrading Institutional Services LLC, stated: "If there were no AI investment boom currently, and the job market was slowing down this year with consumer pressures emerging, the investment community's concerns would be even stronger." He pointed out that this market differentiation confirms the "barbell" structure of the stock market: on one end, a few AI-related companies and stocks are performing strongly, while on the other end, concerns about the labor market and pressure on household spending are dragging down most stocks. Since 2025, the S&P 500 technology sector has risen by 27%. Bank of America stock and quantitative strategist Savita Subramanian stated that the earnings reports of Amazon and Tesla have overshadowed the contraction in profits of other companies in the consumer discretionary sector in the third quarter; profits for consumer staples companies are expected to decline by 1% in that quarter. In her research report on Monday, she warned that a weak labor market could mean "future consumption growth will be impacted," and as the market focuses on a significant increase in AI-related capital expenditures, consumption trends have begun to show "cracks." Data provided by Rob Anderson, U.S. sector strategist at Ned Davis Research, further confirms the weakness of consumer stocks: over the past six months, only 5% of stocks in the S&P 500 consumer staples sector have outperformed the market, one of the lowest ratios in the past 50 years. ## Layoffs Become a Focus Amid Government Shutdown, Market Divided on "Jobless Prosperity" Due to the impact of the U.S. government shutdown, strategists and investors are no longer relying on official labor market data, but are instead paying more attention to corporate layoff announcements. On October 28, United Parcel Service (UPS.US) announced it would lay off 34,000 employees, shocking Wall Street; on the same day, Amazon stated it plans to cut 14,000 corporate jobs; a few days earlier, Target also announced it would cut 8% of corporate positions, approximately 1,800 jobs. Dennis DeBusschere, president and chief market strategist at 22V Research LLC, stated, "More layoffs or a surge in layoff announcements will become a major concern." However, he added, "Fortunately, most companies currently report that employee morale is good." However, some opinions on Wall Street believe that the layoffs during this earnings season are beneficial for the stock market. Citigroup global macro strategists Adam Pickett and Dirk Willer referred to this phenomenon as "jobless prosperity." They believe that additional layoffs caused by AI development will prompt the Federal Reserve to adopt a more accommodative policy. The two strategists wrote in their report on Monday: "This could drive the stock market further up, leading to more AI-related capital expenditures, triggering more layoffs, and ultimately making Federal Reserve policy more accommodative—this cycle continues." "Given the uncertainty of cyclical risks in the U.S. economy, this trend may still be in its early stages, but we believe the stock market may have begun to focus on the risk of 'economic overheating' next year, so we maintain a bullish stance." ### Related Stocks - [Chipotle Mexican Grill, Inc. (CMG.US)](https://longbridge.com/en/quote/CMG.US.md) - [Walmart Inc. 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