Walmart, Costco, XLP Surge As BofA Flags Record Inflows Into Consumer Staples Amid Tech Selloff

A major rotation is sweeping through Wall Street as institutional and retail investors aggressively pivot toward defensive assets, marking a historic shift in market leadership.

Record-Breaking Capital Flight

Data from Bank of America Global Research reveals that capital is pouring into the consumer staples sector at the fastest pace on record.

The bank's latest report indicates that 4-week average net flows into staples stocks, as a percentage of market capitalization, have reached an all-time high in a data set stretching back to 2008.

This unprecedented surge comes as market participants seek shelter from a darkening outlook for high-growth sectors.

"Buyers have been pouring into consumer staples stocks at the fastest pace on record," noted analysts in the report, highlighting a dramatic shift away from the technology-heavy trades that dominated previous years.

The ‘2000 Omen’ And Sector Performance

The rotation is underscored by a rare performance divergence between the State Street Consumer Staples Select Sector SPDR ETF (NYSE:XLP) and the State Street Technology Select Sector SPDR ETF (NYSE:XLK).

In early February 2026, XLP rose more than 1% for two consecutive days while XLK fell by at least 1% during both sessions. Historical data suggests this specific decoupling is extremely rare; before this week, it had only occurred in 2000, immediately preceding the peak of the dot-com bust.

Year-to-date, the performance gap is stark. The XLP is up roughly 11.99% year-to-date, while the technology sector (XLK) has slumped 4.06% as investors flee tech to de-risk portfolios.

Blue-Chip Staples Lead The Charge

The flight to safety is being spearheaded by retail and household giants. Walmart Inc. (NASDAQ:WMT) and Costco Wholesale Corp. (NASDAQ:COST), which together account for over 20% of the XLP's weight, have reached new milestones as consumers prioritize essential spending.

While WMT was up 14.89% YTD, COST rose 13.45% in the same period. Other top holdings, including Procter & Gamble Co. (NYSE:PG), up 9.46% YTD, and Coca-Cola Co. (NYSE:KO), up 10.64% YTD, are seeing renewed interest for their recession-proof dividends.

While some argue that this is a routine rotation driven by rising yields, the sheer velocity of the inflows suggests a deeper structural shift.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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