Best Staples Stocks As Consumer Confidence Hits Multi-Year Low

2026-01-29 13:30:23 ET

Consumer Staples Shift from Laggard to Leader in 2026

The consumer staples sector is off to a strong start in 2026, on pace for its best January performance in over a decade. This momentum is driven by renewed investor appetite for value and defensive stocks after years of tech’s growth dominance. After lagging broad markets in 2025 as AI-fueled gains captured headlines, staples have gained attention, as inflation moderates, rate cut expectations firm, and fiscal stimulus potentially supports consumer spending on essentials. Yet consumer confidence has dipped to its lowest level in over a decade. While I’ve recently highlighted select AI stocks that can outperform in 2026, the consumer staples sector ( XLP ) is significantly outperforming technology ( XLK ) year-to-date:

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