Energy Keeps The Lead Locked Down

Energy was one of just three S&P 500 sectors to close higher yesterday and the only one with positive net breadth on the day. It also has the largest percentage of stocks at 52-week highs by a wide margin. Nineteen percent of Energy stocks are at 52-week highs, compared with 5.9% for second-place Consumer Staples.

That strength has been evident throughout the year.  Energy is the top-performing sector YTD, up 28.9% through yesterday’s close, and has held the top spot for 121 out of the year's 136 trading days.  Materials led for eight days early in the year, Industrials for five, and Technology for just two. The chart below plots all four sectors, with the background shading (bottom legend) indicating the YTD leader on each day.

Under the hood, 19 of the 21 Energy stocks are higher YTD. Although Energy has the fewest constituents of any S&P 500 sector, its average stock is up 32.4% YTD. That easily tops the 11.75% gain for the average S&P 500 stock and trails only Technology, whose average stock is up 38.91%.

Energy’s outperformance this year isn’t unprecedented. If its lead holds, 2026 will be the seventh year since 1990, and the third since 2021, that Energy finishes as the S&P 500’s top-performing sector. Only Technology has finished first more often over that span, doing so 11 times, although its last first-place finish came in 2023. Energy has also endured plenty of difficult years, tying Communication Services and Health Care for the most last-place finishes since 1990, with six each.