NEW YORK, July 16, 2026, 15:23 EDT – Energy stocks gained support from ongoing Middle East oil risks, allowing them to outperform technology by 3.5 percentage points.
- U.S. cash markets traded with the S&P 500 slipping 0.6%.
- Energy rose 1.1%, whereas technology dropped 2.4%.
- Brent remained above $84 while Treasury yields increased and gold declined.
On Thursday, U.S. energy stocks outperformed the technology sector by 3.5 percentage points, despite a decline in Brent crude prices. The divergence underscored that equity markets continued to price in lingering supply risks from the Middle East.
The broader market painted a contrasting picture. The S&P 500 slipped 0.6%, with the Nasdaq Composite down 1.4%. Brent crude dropped 0.7% to $84.34 a barrel.
Markets showed a tilt toward inflationary trends, not safe-haven demand. The yield on the 10-year Treasury gained 2.8 basis points to reach 4.573%. Spot gold fell 1.9% to $3,984.64 per ounce.
Semiconductor shares led the decline, dropping 4.8%, while oil was not the main factor. Paul Nolte of Murphy & Sylvest said chips now make up more than 20% of the S&P 500. “If you look at the rest of the market, it’s doing fine,” Nolte noted. Reuters
Oil prices reversed intraday but maintained their premium. Brent and WTI each gained over 1% at their highest points of the session.
Iran instructed Yemen’s Houthis to be prepared to block the Red Sea oil route if U.S. attacks targeted Iranian power facilities, three sources told Reuters. Kpler data showed that 7.4 million barrels per day moved through Bab el-Mandeb in June, representing roughly 7% of global oil supply.
Alex Hodes, a strategist at StoneX Group NASDAQ:SNEX, cautioned about the possibility that “both of the Middle East’s primary oil export routes could be disrupted simultaneously.” He described this as the tail risk. Reuters
The contrast in movement was pronounced.
| Instrument | Google Finance ticker | Last | Day move |
|---|---|---|---|
| Energy Select Sector SPDR Fund | NYSEARCA:XLE | $57.10 | up 1.1% |
| Technology Select Sector SPDR Fund | NYSEARCA:XLK | $177.16 | down 2.4% |
| SPDR S&P 500 ETF Trust | NYSEARCA:SPY | $749.93 | off 0.6% |
| iShares 20+ Year Treasury Bond ETF | NASDAQ:TLT | $84.12 | down 0.1% |
| Brent crude | — | $84.34 a barrel | off 0.7% |
| U.S. 10-year Treasury yield | — | 4.573% | up 2.8 basis points |
| Spot gold | — | $3,984.64 an ounce | down 1.9% |
ETF pricing data was captured at approximately 15:08 EDT. Reuters index, crude, and yield quotations were displayed with a delay of no less than 15 minutes. The spot gold price was documented at 14:05 EDT.
Energy outperformed the broad-market ETF by 1.7 percentage points. Long Treasuries edged lower even though equities declined. This combination suggested inflation pressure rather than the traditional haven demand.
Exxon Mobil NYSE:XOM was up 1.1% at $146.10. Chevron NYSE:CVX advanced 1.4% to $184.13. TotalEnergies NYSE:TTE slipped 1.6% to $79.03.
The division among peers reflected selective moves by investors. According to early estimates from the company, TotalEnergies’ second-quarter production is close to 2.4 million barrels of oil equivalent per day. Upstream cash flow is forecast to increase by approximately $1 billion compared with the previous quarter. The firm warned its LNG performance will likely decline significantly due to softer gas trading.
The shift was underpinned by rate forecasts. According to Reuters, CME Group NASDAQ:CME FedWatch data indicated the likelihood of a September rate hike was about 53%. Elevated yields made gold less attractive to investors.
U.S. commercial crude inventories dropped by 1.7 million barrels last week, reaching 409.7 million and landing 6% under the five-year mean. Physical buffers continue to be slim. As of July 13, regular gasoline was priced at $3.855 per gallon, a rise of 72.5 cents compared to the previous year.
Risks persist on both sides. Continued Hormuz traffic might reverse the rotation. Rapid escalation at Bab el-Mandeb could intensify the effect.
Currently, the signal remains relative. U.S. oil producers attracted investor interest, whereas long-term bonds and gold declined. Markets viewed the shock more as an inflation threat than as a trigger for a straightforward move into safe assets.
