Costco’s membership growth contrasted with steep drops at Stitch Fix and MGM Resorts.
- Consumer Staples Select Sector SPDR Fund gained 0.17% as investors favored defensive stocks.
- Costco gained 3% after beating Q4 estimates, supported by strong membership growth.
- Stitch Fix plunged 24% on a weak outlook and a client decline, while MGM Resorts fell more than 13% after it withdrew a takeover bid.
U.S. consumer stocks ended mixed last week as sticky inflation and higher bond yields kept investors cautious. The Consumer Staples Select Sector SPDR Fund (XLP) edged up 0.17%, while the Consumer Discretionary Select Sector SPDR Fund (XLY) fell more than 1%.
Consumer Staples Hold Steady Amid Market Volatility
During the week of Sept. 21 to Sept. 25, consumer-facing sector ETFs experienced headwinds that mirrored broader market consolidation. The Consumer Staples Select Sector SPDR Fund (XLP) rose slightly by about 0.17%, ending the week near $82.06. The small gain showed that investors continued to favor defensive consumer staples stocks as markets faced economic uncertainty and higher bond yields.
Meanwhile, the Consumer Discretionary Select Sector SPDR Fund (XLY) fell more than 1%, continuing to absorb heavy institutional selling pressure led by deep pullbacks in retail and apparel bellwethers like Nike Inc. (NKE).
By comparison, both the SPDR S&P 500 ETF Trust (SPY) and the tech-heavy Invesco QQQ Trust (QQQ) gained over 1% and 3%, respectively, driven by strong demand for large technology stocks. U.S. inflation remained high, with the August Consumer Price Index (CPI) rising 0.4% from July and increasing 3.4% year-on-year.
According to Koyfin data, QQQ has gained 21.19% so far this year, followed by SPY at 13.11% and XLP at 5.64%. In contrast, XLY has fallen 7.41%, showing a wide gap between tech and consumer discretionary stocks.
Costco’s Strong Q4 Results And Membership Growth
Costco Wholesale Corp. (COST) emerged as one of the week’s strongest performers as investors favored its membership-driven model and relatively dependable cash flow. COST stock gained 3% over the week after the wholesale retailer’s fiscal fourth-quarter (Q4) 2026 earnings beat Wall Street Estimates.
Paid memberships rose 3.8% to 84.1 million, while executive memberships increased 9.4% to 42.3 million. Renewal rates in the U.S. and Canada reached 92.3%. Members under 40 now account for more than 25% of the total membership base.
Dollar General stock climbed nearly 2% after HSBC upgraded it to ‘Buy’ from ‘Hold’ and raised its price target to $160 from $125. Analyst Joseph Thomas said the company’s recovery is showing real progress and expects sales growth to reach the high end of its guidance.
Walmart stock (WMT) gained more than 1% as shoppers focused on value. Strong store traffic and steady demand for groceries and essentials helped the retailer attract more consumer spending.
Stitch Fix, MGM Resorts Lead Declines Among Consumer Discretionary
Stitch Fix stock plummeted 24% during the week after its Q4 active clients fell 1.4% from last year, along with a weak outlook. William Blair downgraded Stitch Fix to Market Perform from Outperform. Analyst Dylan Carden said the company has improved its business, but its FY2027 outlook has raised concerns about future growth and visibility.
MGM Resorts stock recorded an over-13 % weekly plunge after Barry Diller’s People Inc. walked away from its plan to buy the casino giant in a deal worth more than $18 billion, including debt. People Inc. already has a 27% stake in MGM. Mizuho cut its MGM Resorts price target to $55 from $60 but kept an ‘Outperform’ rating. The firm said People Inc.’s decision to withdraw its $48-per-share offer for MGM was not surprising. Mizuho also believes MGM’s future projects are not fully reflected in its stock price.
Nike stock remained under pressure and has plunged 76% from its November 2021 peak. Investors continued to digest weaker guidance, changes to its wholesale strategy and a series of analyst price-target reductions. BofA downgraded Nike to Underperform from Neutral and cut its price target to $30 from $47. The firm expects Nike’s turnaround to take longer, with sales likely to decline through FY27.
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