OK, we get it; you've heard enough about the Utilities sector for now, but check out these charts, they're nuts. Starting with the 'boring-est' of them, the SPDR Sector ETF for the Utilities sector (XLU) has not only gone practically straight up but check out all the green bars (days where the closing price was higher than the opening price) in the shaded area. Until the last week, it was a green and clean line higher. At one point last week, the sector closed higher than it opened on 16 out of its prior 17 trading days.

The chart below puts the run of higher closes into perspective. On a rolling 15-trading day period (three weeks), the reading of 14 reached on 5/9 was a level matched during only one other period in the last 24 years - January 2020.

While the S&P 500 Utilities sector has performed exceptionally well lately, not all Utilities are created equal. The chart below compares the performance of the S&P 500 Utilities sector to the Dow Jones Utilities Index over the last year. From last May through mid-February, the two indices performed hand in hand, but their paths have steadily diverged since February. As the two have continued to generally move in the same direction, the performance gap may not seem large, but it has actually been historic.

Over the last 50 trading days, the S&P 500 Utilities sector has outperformed the Dow Jones Utilities sector by over three percentage points, and at one point during the divergence cited above, it reached 4.7 percentage points. Levels like that haven't been seen in over two decades (December 2002). For years, utility stocks have been thought of as somewhat interchangeable with each other as their heavy regulation made it hard to differentiate one from the other. The rise of artificial intelligence (AI) and the ever-increasing demand from data centers have reshaped the Utilities sector. This, coupled with a growing number of less-regulated players, has created a more dynamic – but also less standardized – environment. As a result, the inclusion or exclusion of certain companies in different indexes can lead to significant performance disparities, as we've seen in this case.

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