The US Consumer Discretionary Index has reached its lowest point relative to the S&P 500 in two decades, as investor focus shifts towards artificial intelligence (AI) investments. Despite the S&P 500's continued growth, consumer discretionary stocks have underperformed since late 2025, with a notable 5% decline in February 2026. As of mid-May, the index hovers around 1,950, highlighting its relative weakness. Key factors contributing to this underperformance include shifting tariff policies, persistent inflation, and a softening job market, which have particularly impacted lower-income households. Meanwhile, investor enthusiasm has pivoted towards AI-related companies, allowing the S&P 500 to thrive despite the consumer sector's struggles. Amazon and Tesla, which constitute 38% of the consumer discretionary index, have been unable to lift the sector, underscoring the structural challenges it faces.