Retail stocks are bucking the broader market's uptrend this year, hampered by consumer concerns and tariffs. The State Street SPDR S & P Retail ETF (XRT) fell for a fourth straight session on Tuesday, bringing its year-to-date performance to a slide of more than 1%. The broad S & P 500 , by comparison, is tracking to end 2025 up more than 12%. XRT .SPX YTD mountain XRT vs. S & P 500 in 2025 The retail fund is now poised to record its first losing year in three and second negative year of the last seven. A sizable chunk of the downturn has come since the start of October, with the ETF sliding more than 9% in the fourth quarter. CarMax shares are among those leading the drop with a plunge of more than 60% this year, while Abercrombie & Fitch and Shoe Carnival have each tumbled more than 50%. Major player Target has shed around 34% in 2025. On the other hand, discount retailers Five Below , Dollar General and Dollar Tree have each rallied more than 35% this year. Carvana has surged more than 56%. Traders should look at industries within the broader umbrella sector when examining where to put money to work, according to Larry Tentarelli, chief technical strategist at the Blue Chip Daily Trend Report. He said defensive retailers like TJX and automakers have been performing well, while restaurant stocks have been lagging. "I don't know that I can really just look at retail as a basket and say the consumer is weak or the consumer strong," Tentarelli said. "It's really industry-specific right now." Consumer health and tariffs Retail stocks have taken hits this year as tariffs threatened profit margins, consumer spending has flashed warning signs and lower-income shoppers have buckled under continued inflationary pressures. At the same time, the group hasn't seen the tailwinds pushing up stocks viewed as beneficiaries of the artificial intelligence boom. President Donald Trump's broad and steep levies have been front and center for sector investors this year as they wondered how shoppers would react coming off years of high inflation. While Walmart CEO Doug McMillon said in August that tariffs have had a "muted" impact on spending this year, he said costs for the retailer have gone up each week. Declining consumer confidence has also clouded the outlook. Home Depot CFO Chief Financial Officer Richard McPhail said Tuesday that "ongoing consumer uncertainty and continued pressure in housing" have weighed on home improvement demand. Shares of the stock tumbled more than 4% in the session after the company missed Wall Street's earnings per share estimates for the third straight quarter. HD 1D mountain Home Depot, 1-day Traders have also continued monitoring the effects of the "K-shape" or "two-speed" economy, which suggests that financial realities have varied widely by income class. Procter & Gamble said last month that its wealthier consumers were buying bigger-sized products from club retailers, while lower-income consumers were trying to hold off on making purchases. "The consumer environment is not great, but stable," Procter & Gamble CFO Andre Schulten said. Investors will keep an eye on earnings from Lowe's , Target and TJX due Wednesday, followed by Walmart and Gap on Thursday. — CNBC's Melissa Repko and Laya Neelakandan contributed to this report.
