Happy Monday, investors. The US government is nearing yet another shutdown, and lawmakers are set to meet with President Trump today to try and avert disaster. Still, certain components of the stock market are telling us that asset allocators are largely unbothered.

Today’s column is a guest post from Hardika Singh, an economic strategist at Fundstrat Global Advisors, an investment research firm.

For all the hullabaloo about the so-called recession round the corner, investors aren’t all that worried. 

If they were, shares of consumer staples — known for making everything from ketchup and potato chips to toothpaste and cleaning products — would be shining brighter. 

The S&P 500’s consumer-staples sector is the only one of the index’s 11 segments that’s on pace to finish in the red this quarter, down 3.2%. 

The overall index has added 7.1% in comparison, led by a meteoric rise in information-technology and communication-services sectors, up 12% and 13% this quarter, respectively.

The idea is that when investors are anxious about a slowing economy, they buy boring stocks because consumers will prioritize buying toilet paper over upgrading to a new iPhone. 

But since staples are down, it’s a good sign for the economy. 

Among the biggest contributors to the quarterly declines are Coca-Cola, Costco and Colgate-Palmolive, which have slipped 7.2%, 7.5% and 12%, respectively. 

That marks a U-turn from their performance earlier in the year.

Worries about what tariffs would do to corporate margins sent investors rushing out of risky tech stocks and into defensive sectors like staples. 

While a warm bowl of Campbell’s can be comforting, investors didn’t want to come back for seconds. 

It’s hardly their fault.

It’s not easy competing with hot tech stocks when Nvidia is the economy. 

The chipmaking giant recently announced it will invest $100 billion into OpenAI, without any voting interest, and supply it with its own chips in a circular arrangement. 

Nvidia has also cozied up to its rival Intel in recent days, announcing an investment of $5 billion to design custom CPUs. 

Its shares have jumped 13% this quarter, while Intel’s are up 58%. 

AI momentum has dragged in even the bench players like Oracle, whose shares skyrocketed after it was reported that it expects to collect $300 billion from OpenAI over the next five years. 

Meanwhile, six of the Magnificent Seven are in the green for the year, thanks to a massive recovery in shares of laggards Apple, Tesla and Alphabet. 

These big numbers show that the tech bull run shows few signs of slowing, which can also mean they also look expensive compared to staples and the broader index. 

Still, remember that times can seem good until they’re not. Diversifying in staples can protect against steeper losses during adversity. 

Even now, shares of staple constituent Dollar General are outperforming Nvidia this year, up 35% over the chipmaker’s 29% increase, as Opening Bell Daily has reported.

The discount retailer recently said that six-figure shoppers made up two-thirds of its new customers in the second quarter, showing just how financially stressed the consumer is. 

Hardika Singh is an economic strategist at Fundstrat Global Advisors, an investment research firm. Follow her on LinkedIn and read her disclosures here.

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🏙Eric Adams dropped out of the NYC mayoral race. The mayor said the “constant media speculation” and the campaign finance board’s decision to withhold “millions” have undermined his ability to raise funds for a serious campaign. His decision could boost Andrew Cuomo’s odds versus Mamdani. (CNBC)

👀 President Trump poked at Jerome Powell again. He posted a cartoon on social media depicting him firing the Fed Chairman. Powell has repeatedly said he would remain in office through his term. (Barron’s)

📊 Rate cuts may not fix the job market. Tight credit and trade uncertainty weigh on hiring plans, with or without easing cuts. Companies must the navigate productivity gains from AI paired with still-high borrowing costs and a general reluctance to hire. (WSJ)

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📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

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