NEW YORK, January 1, 2026, 1:53 PM ET — Market closed
- U.S. utilities ended the year lower, with the sector’s main ETF XLU down 0.6% in the last session.
- NextEra disclosed a $4 billion at-the-market equity program, keeping focus on dilution risk and funding costs.
- Duke filed for an early site permit tied to potential new nuclear buildout in North Carolina, adding to sector capex scrutiny.
U.S. utilities stocks headed into the New Year on the back foot after NextEra Energy disclosed a $4 billion at-the-market share-sale program, a move that can add supply to the market over time. The Utilities Select Sector SPDR Fund, an exchange-traded fund that tracks a basket of utility stocks, last closed down 0.6% at $42.69. (SEC filing)
Why it matters now: utilities are among the most interest-rate-sensitive parts of the equity market because investors often value them for steady cash flows and dividends. When financing costs rise or equity issuance increases, the sector’s “bond-proxy” appeal can fade fast.
The timing also matters. Utilities are in the middle of multi-year investment cycles for grid upgrades and new generation, and investors are increasingly focused on how those plans will be funded as 2026 begins.
In the year’s final session on Wednesday, NextEra shares ended down 0.3% at $80.28. Duke Energy fell 0.4% to $117.21 and Southern Co slipped 0.4% to $87.20, while Exelon declined 0.8% to $43.59 and Dominion Energy dropped 0.8% to $58.59. U.S. stocks broadly finished the day lower in thin year-end trading. (Reuters market wrap)
NextEra’s filing said the company may offer and sell common stock “from time to time” for aggregate gross proceeds of up to $4 billion through multiple banks acting as agents. An at-the-market program is designed to drip shares into the open market at prevailing prices, rather than in a single block, and can dilute existing shareholders if fully used.
Duke also drew attention this week after submitting an early site permit application to the U.S. Nuclear Regulatory Commission for a site near its Belews Creek Steam Station in North Carolina, as it evaluates new nuclear options. “Submitting an early site permit application is an important next step in assessing the potential for small modular reactors at the Belews Creek site,” Kendal Bowman, Duke Energy’s North Carolina president, said. 1
An early site permit is a pre-approval process that clears environmental and site safety reviews before a company picks a final reactor design, reducing the risk of delays if it later chooses to build. Duke’s application would secure the site for up to 20 years, Reuters reported, and included multiple potential reactor technologies. (Reuters)
The nuclear angle is part of a broader theme powering the sector: utilities are positioning for higher electricity demand tied to data centers and electrification, which is driving interest in new generation sources and long-term supply deals. NextEra has highlighted that trend in recent announcements tied to tech-sector demand. (Reuters)
Macro remains the other key swing factor. U.S. jobless claims fell to 199,000 for the week ended Dec. 27, a data point that keeps investors focused on what the Federal Reserve does next after its latest rate cut, Reuters reported. For utilities, the path of interest rates tends to show up quickly in relative performance. (Reuters)
Before the next session, traders will be watching whether utilities regain traction when U.S. markets reopen on Friday, and whether early-January data shifts expectations for rate policy. The next major labor-market catalyst is the December employment report, scheduled for release on Jan. 9 at 8:30 a.m. ET. 2
Technically, XLU’s last session range of roughly $42.69 to $43.11 left the ETF straddling the $43 level, with the low-$42s acting as the nearest support area. A break above $43.10 would put the prior day’s highs back in play, while another slip below about $42.70 would keep the sector’s near-term momentum pointed lower.
Earnings season is the next company-specific test, as investors look for updated guidance on capital spending, financing plans, and regulatory timelines. Earnings calendars such as MarketBeat currently list NextEra’s next report date around Jan. 23, though dates can shift; investors will likely focus on whether the company signals the pace and purpose of any equity sales under the new program. 3
For now, utilities enter 2026 with two forces pulling in opposite directions: rising power demand that supports investment, and the cost of funding that investment, which can cap valuations when rates stay elevated.
