3 sectors are rotating · 8 stable
Three S&P 500 sectors flipped from positive to negative relative strength versus SPY over the last 30 days compared to the same calendar window in 2025: Consumer Discretionary (XLY), Communication Services (XLC), and Industrials (XLI). All three were leadership groups in spring 2025 and now trail the index. No sectors flipped positive. The widest swing is Consumer Discretionary — 11.4 percentage points of relative strength, from +5.1pp ahead of SPY a year ago to -6.3pp today. The most notable internal split is inside Industrials, where defense subsector ETFs (ITA, XAR) absorbed positive 10-day money flow even as their underlying prices fell, while the broad Industrials SPDR (XLI) hemorrhaged roughly $2.6B on a price-volume basis. Read together, this is a narrowing-market signature. Technology is the only sector with positive relative strength in both windows (+10.6pp now, +8.1pp prior), and the rest of the tape is being sold against SPY. The base-effect caveat matters: the 2025 comparison window included a sharp April recovery rally that flattered cyclicals, so part of the negative rotation is a higher prior-year hurdle rather than fresh distribution.
Consumer Discretionary
XLYConsumer Discretionary swung from +5.1pp relative strength a year ago to -6.3pp today — the widest move on the board. The spring 2025 recovery was disproportionately led by AMZN, TSLA, and homebuilders pricing in a soft landing; that premium has been bled out. Discretionary names with consumer-cycle exposure (autos, restaurants, home improvement) are now trading as if an earnings slowdown is forming, while AMZN and TSLA are individually trailing the mega-cap cohort. Money flow confirms the read: XLY itself shed roughly $460M over the last 10 days, with IYC and VCR also in distribution. Only the smaller Fidelity sector index (FDIS) and First Trust's factor-weighted FXD show net inflows — and both are too small to absorb the dollar rotation out of the SPDR.