Consumer Sectors Have Been the Missing Piece of This Year’s Rally
JPMorgan believes some of the market’s weakest consumer-related sectors may offer attractive opportunities as investors look ahead to the second half of 2026.
Strategist Mislav Matejka noted that while financials, industrials and technology stocks have all benefited from supportive macroeconomic themes, consumer cyclicals have largely been left behind.
As a result, many consumer stocks are now trading at depressed relative levels after years of underperformance following the post-pandemic recovery.
Low Valuations and Weak Sentiment Often Mark Turning Points
The bank argued that current market conditions resemble previous periods that have preceded strong recoveries in consumer-focused equities.
Many stocks in the sector are trading at relatively low valuations, while consumer confidence surveys in numerous markets remain near historic lows.
Historically, JPMorgan noted, consumer stocks have often begun outperforming when sentiment is weakest and expectations are already heavily discounted.
Lower Oil Prices Could Help Consumers
One of the most important potential catalysts identified by the bank is the decline in energy prices.
Brent crude has fallen roughly 25% from the previous quarter, which could help boost household purchasing power while easing inflation pressures.
JPMorgan believes lower energy costs could also give central banks more flexibility, creating a more supportive backdrop for consumer spending.
Additional positives include lower tariffs and the possibility of consumer-focused policy initiatives ahead of U.S. midterm elections.
Travel, Luxury and Retail Stand Out
Among consumer sectors, JPMorgan sees the greatest opportunity in luxury goods, airlines, hotels, travel and leisure businesses, and retail companies.
The bank believes these areas could respond particularly well if confidence and spending trends improve during the second half of the year.
Caution Remains Around Automakers
The automotive sector remains JPMorgan’s least-favored consumer industry due to ongoing structural challenges.
Even so, the bank acknowledged that recent weakness has become increasingly extreme, suggesting the group may eventually attract value-oriented investors if sentiment begins to stabilize.
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