To The Moon

Since last Thursday, the $S&P 500(.SPX)$ has corrected for 4 days, with 8 out of the top 10 largest market cap stocks falling, $Tesla Motors(TSLA)$ , $Broadcom(AVGO)$ down over 10% in the last 5 days, $NVIDIA(NVDA)$, $Microsoft(MSFT)$, $Amazon.com(AMZN)$, $Alphabet(GOOG)$, $Meta Platforms, Inc.(META)$ all falling, with only $Apple(AAPL)$, $Berkshire Hathaway(BRK.B)$ remaining up in the last 5 days.

The recent pullback in US stocks may be the result of a combination of factors, including declining consumer confidence, weak economic data, uncertainty over tariff policies, and market concerns about inflation.

Despite the significant drop in large caps, many sector stocks still show a positive upward trend.

In the market on Tuesday, we saw the Consumer Defensive sector $Consumer Staples Select Sector SPDR Fund(XLP)$ in the $S&P 500(.SPX)$ leading the gains, with the leading industry focusing on the Hypermarkets & Super Centers industry, which rose by 2.88%. The companies driving the rise in the industry included: $Wal-Mart(WMT)$ , $Costco(COST)$ , $BJ's Wholesale Club Holdings Inc.(BJ)$ , $Pricesmart(PSMT)$ , $Target(TGT)$ , and $Dollar Tree(DLTR)$ .

• $Wal-Mart(WMT)$ is one of the world's largest retailers, operating in many countries and regions globally, known for its low-price strategy and wide range of products. After experiencing a three-day decline following the release of its earnings report on February 20, 2025, the stock price rebounded and rose by 4.29% yesterday.

• $Costco(COST)$ is one of the largest membership-based warehouse retailers in the US, attracting consumers with low prices and bulk products, while also providing various value-added services. Its stock price reached a new high on February 13, then began to fall back, closing down 2.61% on February 20 to a low point before starting to rebound and rise significantly, up 1.94% yesterday。

• $BJ's Wholesale Club Holdings Inc.(BJ)$ is a leading warehouse club operator on the US East Coast, providing members with low-priced goods and services。The company's stock price reached a new high on February 13, then continued to consolidate and fall until it began to rebound on February 24, with a noticeable increase of 1.88% on February 25。

• $Pricesmart(PSMT)$ is a membership-based warehouse retailer in Latin America and the Caribbean, offering a variety of goods and services。Affected by the ex-dividend effect on February 28, the company's stock price experienced a significant drop on February 14 and 18, then began to rebound, with a noticeable increase of 1.50% on February 25。

• $Target(TGT)$ is a well-known retailer in the US, offering a variety of goods and services, known for its fashionable and high-quality products。Target's stock price fell significantly on its dividend payment date on February 12, then entered a short-term consolidation period, and eventually started to rise after falling 3.01% on February 21, with a gain of 1.29% on February 25。

• $Dollar Tree(DLTR)$ is a discount retailer in the US, attracting consumers with $1 low-priced goods。Dollar Tree's stock price rose significantly by 4.14% on February 18, then continued to rise for two days, even reaching a high of $79.80 on February 20. After a pullback on February 21, it continued to rise, with a gain of 1.21% on February 25。

Looking at the past week, the Healthcare sector $Health Care Select Sector SPDR Fund(XLV)$ performed the best, likely driven by the advancement of AI+medical applications and market expectations of increased merger and acquisition activity in 2025; the Consumer Defensive sector $Consumer Staples Select Sector SPDR Fund(XLP)$ ranked second in performance, as this sector is suitable for hedging and risk avoidance; the Real Estate sector rose by 1.17%. The Technology sector, which ranked last, fell by as much as 5.73%.

Over the past month, the Consumer Defensive sector has continued to lead the gains!

The following table summarizes the performance of the 11 sectors of the S&P 500 index and the corresponding ETF gains over the past month:

In February, the US stock market experienced shocks from Deepseek and went through the earnings season, leading to fluctuations in stock prices, including rises and falls, as well as pullbacks.

Why did the consumer defensive sector lead the gains?

Macro-wise, the factors influencing the rise and fall of the 11 major industries of the S&P 500 index are as follows (for communication purposes only):

1. The Consumer Defensive sector ( $Consumer Staples Select Sector SPDR Fund(XLP)$ ) takes the lead, possibly because the demand for products from staple consumer goods companies is relatively stable and not greatly affected by economic cycles. Particularly in times of increased economic uncertainty, investors tend to invest in such companies for risk avoidance.

2. The Real Estate sector ( $Real Estate Select Sector SPDR Fund(XLRE)$ ) rises, probably due to the current low-interest-rate environment, which reduces the loan costs for homebuyers and increases demand for housing. In addition, increased demand for commercial and residential real estate during economic recovery may also drive the sector's rise.

3. The rise of the Healthcare sector ( $Health Care Select Sector SPDR Fund(XLV)$ ) rises, probably be related to the trend of an aging population, with the increasing elderly population leading to higher demand for medical services and products. Moreover, innovations and the development of new technologies in the healthcare industry may also drive the sector's performance.

4. The Basic Materials sector ( $Materials Select Sector SPDR Fund(XLB)$ ) rises, probably have benefited from the global economic recovery and increased infrastructure construction, which increased the demand for raw materials. Additionally, the rise in prices of certain commodities may also have a positive impact on the sector.

5. The Financial sector ( $Financial Select Sector SPDR Fund(XLF)$ ) rises, probably due to increased economic activity, which typically leads to increased loan demand, thereby increasing the income of banks and financial institutions. In addition, a stable interest rate environment may also have a positive impact on the sector.

6. The Utilities sector ( $Utilities Select Sector SPDR Fund(XLU)$ ) falls, probably due to the impact of rising interest rates, as these companies usually have high levels of debt, and rising interest rates increase their financing costs. Moreover, changes in regulatory policies may also affect the sector.

7. The Communication Services sector ( $Communication Services Select Sector SPDR Fund(XLC)$ ) falls, probably due to increased industry competition and market saturation, which may lead to slower revenue growth. In addition, technological changes and shifts in consumer behavior may also affect the sector.

8. The Energy sector ( $Energy Select Sector SPDR Fund(XLE)$ ) falls, probably due to fluctuations in crude oil prices, and if crude oil prices fall, the profitability of energy companies may be affected. Moreover, the global energy transition and the push for renewable energy may also affect the sector.

9. The Technology sector ( $Technology Select Sector SPDR Fund(XLK)$ ) falls, probably due to the market's re-evaluation of high-value companies, especially as major tech stocks in the US were hit by Deepseek, causing significant declines in their stock prices。

10. The Consumer Cyclical sector ( $Consumer Discretionary Select Sector SPDR Fund(XLY)$ ) falls, probably due to reduced consumer spending, especially in times of increased economic uncertainty. Moreover, changes in consumer preferences and market competition may also affect the sector.

11. The Industrials sector ( $Industrial Select Sector SPDR Fund(XLI)$ ) falls, probably due to the slowdown in global trade and reduced manufacturing activity. In addition, supply chain issues and fluctuations in raw material costs may also affect the sector.

• Have you been paying attention to leading industries recently?

• Do you think this trend will continue amidst the pullbacks of large-cap stocks?

• What are your target stocks?

• Feel free to share and discuss in the comments section.

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