Key Highlights

  • Consumer non-durables gained 7.46% and utilities 4.63% over one month, while electronic technology fell 8.25%.
  • The gap between consumer non-durables and electronic technology is 15.71 percentage points, and 12.88 points for utilities (both calculated).
  • Health services, utilities and consumer non-durables average +7.21%, against -9.34% for electronic technology, producer manufacturing and non-energy minerals (calculated).
  • The 10-year Treasury yield fell to 4.96% on October 22 from 5.31% on October 5.
  • Electronic technology still leads year to date at +42.00%, against +3.27% for utilities.

Defensives vs Cyclicals: Why Is the Gap 16.55 Points in One Month?

Investors have favored steady earners since early October. As screened on Friday, October 23, 2026, health services gained 9.54%, consumer non-durables 7.46% and utilities 4.63% over one month, while non-energy minerals fell 9.93%, producer manufacturing 9.83% and electronic technology 8.25%. A simple average of the first three is +7.21% and of the last three is -9.34%, a 16.55-point gap (calculated).

The trigger was a technology sell-off. In the week of October 12 to 16 the Nasdaq Composite fell 4.48% and technology funds lost 7.70%, while consumer staples rose 5.02%, health care 3.45% and the Dow Jones Industrial Average gained 0.67%, according to a weekly sector recap.

Utilities and Consumer Non-Durables: What Is Behind Their Gains?

Utilities led the week of October 5 to 9 at 4.36% and staples added 3.86%, a move the recap framed as a reversion to the mean. The 10-year Treasury yield reached 5.31% on October 5 and fell to 4.96% on October 22, which usually helps rate-sensitive utilities. The Federal Reserve raised its target range to 3.75% to 4.00% in September, so the yield decline is the more recent influence.

Utilities remain down 5.84% over three months and 6.11% over six, so the month is a rebound from a weak base, and its year-to-date gain of 3.27% trails electronic technology by 38.73 points (calculated).

Procter and Gamble (NYSE:PG) reported on October 22 that core EPS was $2.00 against $1.99, sales rose 4% to $23.3 billion, and commodity costs trimmed gross margin by 140 basis points. The company flagged an after-tax commodity headwind of about $1.4 billion in fiscal 2027, a reminder that defensive earnings face their own cost pressure.

Cyclical Weakness: Why Are Chips and Industrial Names Lagging?

Electronic technology fell 8.25% over the month and 2.42% over the week even though it is up 42.00% year to date. On October 22, Lam Research (NASDAQ:LRCX) closed down 11.76% and Applied Materials (NASDAQ:AMAT) fell 8.16% as AI spending worries and Lam's outlook weighed on equipment makers. Meta (NASDAQ:META) reported third-quarter free cash flow of negative $2.12 billion, adding to the funding debate.

Producer manufacturing is down 14.51% over three months and non-energy minerals fell 9.93% over the month, with no single disclosed catalyst. Transportation (+1.18%) and industrial services (-0.81%) were flatter, so weakness is concentrated rather than universal.

Defensive Rotation Next: Is the Trade Pausing?

On Friday, October 23, electronic technology rose 0.50% while utilities, consumer non-durables and health services fell 0.17%, 0.91% and 0.84%, the first sign of stabilization. Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) report on October 28, and Amazon (NASDAQ:AMZN) on October 29, alongside the Federal Reserve meeting on October 27 and 28.