Summary

• State Street Financial Select Sector SPDR ETF is downgraded to Sell after a recent rally and ongoing underperformance versus the S&P 500.
• XLF remains down 2.6% in 2026, lagging peers, with technical gaps below and resistance at $54–56, raising caution on further upside.
• My expected return for XLF is -2.7%, reflecting bearish market probabilities, valuation concerns, and a preference for cash or select dividend ETFs.
• Alternatives like NOBL, SMDV, and REGL are favored for their dividend focus and relative sector positioning, while Utilities (XLU) is rated Hold.

Financials are still down in 2026 after a very tough Q1, but they have rebounded sharply. I initiated coverage of the sector a year ago, giving State Street Financial Select Sector SPDR ETF (

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