Energy stocks are beating technology names this year, making energy the best-performing sector on Wall Street. That is happening even as the ongoing AI boom continues to drive strong gains across the US economy.
The S&P 500 energy sector has jumped 44.46% this year, compared to a 23% gain for information technology. Among the tracking funds, the State Street Energy Select Sector Fund (NYSE:XLE) is up 40%, while the State Street Technology Sector Fund (NYSE:XLK) has gained 28%.
XLE vs XLK year-to-date performance | Source: TradingView
Most of the gains in the energy sector have been driven by the oil, gas, and consumable fuels sub-sector, which has jumped by 45%. Energy and equipment segment has risen by 36% this year.
The energy sector has done well because of the ongoing US-Iran war, which is showing signs of extending. Ansar Allah, commonly known as Houthis, have taken a large part of Yemen, while the Iraqi resistance launched missiles towards the East-West pipeline, pushing the country to close it.
