Consumer Staples (XLP) vs 10Y Treasury Yield
XLP (Consumer Staples Select Sector SPDR Fund) tracks consumer staples sector of S&P 500. Top holdings April 2026: Procter & Gamble (PG) ~14 percent, Costco (COST) ~12 percent, Coca-Cola (KO) ~9 percent, Walmart (WMT) ~9 percent, PepsiCo (PEP) ~6 percent.
Also known as: Consumer Staples (XLP) (ETF_XLP, consumer staples) · 10Y Treasury Yield (10Y yield, 10 year treasury, TNX)
Why This Comparison Matters
XLP (Consumer Staples Select Sector SPDR Fund) tracks consumer staples sector of S&P 500. Top holdings April 2026: Procter & Gamble (PG) ~14 percent, Costco (COST) ~12 percent, Coca-Cola (KO) ~9 percent, Walmart (WMT) ~9 percent, PepsiCo (PEP) ~6 percent. The 10-year Treasury yield (FRED DGS10) sits at 4.31 percent. XLP has bond-proxy characteristics (high dividends ~2.5 percent, stable cash flows) but also inflation pass-through (pricing power). Pre-2024 XLP had moderate -0.30 to -0.45 correlation with 10Y. The 2024-2026 era saw XLP underperform: defensive characteristics overshadowed by AI capex tech rally + GLP-1 drug impact (Costco beat, but P&G/PepsiCo facing headwinds from Ozempic/Wegovy reducing consumer food/beverage demand).
The April 2026 Configuration
XLP price approximately $80 (April 2026, near recent highs). 10Y yield 4.31 percent. Top holdings: P&G ~14%, Costco ~12%, Coca-Cola ~9%, Walmart ~9%, PepsiCo ~6%. Combined top 5 ~50 percent. Dividend yield 2.5 percent.
XLP composition: food & beverage (PEP, KO, MDLZ, KHC, MO) ~30%; household products (PG, CL, CHD) ~25%; personal care (EL, KMB) ~15%; retail (COST, WMT) ~21% (Costco + Walmart); food retail (KR) ~3%; tobacco (PM, MO) ~6%.
XLP performance 2024-2026: lagged SPY substantially. 2024 +14% vs SPY +25%. 2025 modest. 2026 stable. Defensive characteristics didn't pay during AI capex boom. GLP-1 drug impact: Walmart/Costco grocery same-store-sales growth slower; P&G/PEP/KO facing volume headwinds.
Forward-looking: Costco continues fundamental outperformance (membership model + value proposition). Walmart e-commerce + grocery dominance. P&G/Coca-Cola facing GLP-1 transition. XLP sensitivity to 10Y modest but defensive bid emerges during equity volatility.
Why XLP Has Mixed Rate Sensitivity
XLP rate sensitivity less direct than XLU/XLRE due to multiple offsetting drivers.
Bond proxy framework: high dividends (~2.5%), stable cash flows, predictable demand. Should move inversely to 10Y. 100bp 10Y rise typically associated with 3-5% XLP decline (vs 8-12% XLU/XLRE).
Inflation passthrough: pricing power offsets duration drag. Companies pass cost increases to consumers. P&G, Coca-Cola, Costco have pricing power. Inflation surge regimes (2021-2022) initially compressed XLP multiples but earnings recovered.
Defensive bid: during equity volatility, defensive sector flows compress XLP risk premium. Net effect can be positive even with rising rates.
GLP-1 disruption: Ozempic/Wegovy reducing consumer food/beverage demand. Specific to XLP holdings (PEP, KO, MDLZ, KHC). New 2024-2026 era headwind not historical.
The practical implication: XLP modestly inversely correlated to 10Y with multiple offsetting factors. Pre-2024 -0.30 to -0.45 correlation. 2024-2026 era weaker correlation due to GLP-1 specific impacts.
How XLP Holdings Differ in Rate Sensitivity
XLP holdings vary in rate sensitivity. Costco (COST 12%): premium retailer, no rate sensitivity directly, growth-style multiples. Walmart (WMT 9%): mass retailer, modest rate sensitivity through real estate financing. P&G (PG 14%): consumer staples, defensive, dividend yield 2.4%. KO (9%): same. PEP (6%): same.
Conditional Forward Response (Tail Events)
How 10Y Treasury Yield has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in Consumer Staples (XLP). Computed from 1,238 aligned daily observations ending .
Following these triggers, 10Y Treasury Yield rises 0.74% on average over the next 5 sessions, versus an unconditional baseline of +0.60%. 123 qualifying events; 10Y Treasury Yield closed positive in 54% of them.
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Frequently Asked Questions
What are XLP and the 10Y Treasury yield?+
XLP (Consumer Staples Select Sector SPDR Fund) tracks consumer staples sector of S&P 500. Top holdings April 2026: Procter & Gamble ~14%, Costco ~12%, Coca-Cola ~9%, Walmart ~9%, PepsiCo ~6% (top 5 ~50%). XLP price ~$80 April 2026. Dividend yield 2.5%. 10Y Treasury yield 4.31%. XLP composition: food & beverage (PEP, KO, MDLZ, KHC, MO) ~30%; household products (PG, CL, CHD) ~25%; personal care (EL, KMB) ~15%; retail (COST, WMT) ~21%; food retail (KR) ~3%; tobacco (PM, MO) ~6%. XLP 2024 +14% vs SPY +25%. Costco +30% past 12 months; Walmart +20%; PG/KO/PEP modest gains.
Why does XLP have mixed rate sensitivity?+
Multiple offsetting drivers. Bond proxy framework: high dividends ~2.5%, stable cash flows. 100bp 10Y rise typically associated with 3-5% XLP decline (vs 8-12% XLU/XLRE). Inflation passthrough: pricing power offsets duration drag. P&G, KO, Costco have pricing power. Defensive bid: during equity volatility, defensive sector flows compress XLP risk premium. GLP-1 disruption (Ozempic/Wegovy) reducing food/beverage demand for traditional staples. New 2024-2026 era headwind. XLP modestly inversely correlated to 10Y with multiple offsetting factors. Pre-2024 -0.30 to -0.45 correlation. 2024-2026 weaker due to GLP-1 specific impacts.
How do XLP holdings differ in rate sensitivity?+
COST 12%: premium retailer, no rate sensitivity directly, growth-style multiples. WMT 9%: mass retailer, modest rate sensitivity through real estate financing. PG 14%: defensive, dividend yield 2.4%. KO 9%: same. PEP 6%: same. Effective duration: COST/WMT lower (growth multiples + operational efficiency). PG/KO/PEP higher (dividend-yield-sensitive). April 2026: COST +30% past 12 months (membership growth + e-commerce). WMT +20% (grocery + e-commerce). PG/KO/PEP modest gains (single-digit). Compositional shift: retail (COST+WMT) outperforming traditional staples. Traditional staples facing GLP-1 + valuation headwinds.
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