New York, Jan 18, 2026, 14:06 EST — Market closed.
U.S. utility stocks slipped Friday, dragging the Utilities Select Sector SPDR Fund (XLU) down 0.5%. Still, the ETF managed to gain roughly 2% for the week, underscoring how swiftly money flows back into steady sectors when markets get volatile.
That’s key because utilities behave like rate-sensitive income stocks. Their dividends lose some appeal when government bond yields tick higher. The U.S. 10-year Treasury yield closed Friday at 4.24%, up from 4.17% just the day before, according to U.S. Treasury data.
The upcoming session follows a long weekend as U.S. stock markets shut Monday for Martin Luther King Jr. Day. Trading resumes Tuesday, tightening the timeframe for investors to adjust before new policy moves and earnings reports hit.
The power market is grabbing more attention. The White House has called on PJM Interconnection to hold an emergency power auction amid rising data center demand, aiming to prevent rolling blackouts. It also pushed for limits on what current plants can charge in PJM’s capacity market, which compensates generators for future availability. “PJM has been too damn slow to let new generation onto the grid at a time where energy demand is going up,” Pennsylvania Governor Josh Shapiro said during the event. Reuters
Another deal tied to the same initiative would impose two-year price caps on upcoming PJM auctions and require new data center players like Amazon and Google to shoulder a bigger portion of grid expansion expenses, two insiders familiar with the issue said.
Exelon, with utilities serving the PJM region, backed extending the existing capacity market price cap. It also pledged an additional $10 million toward customer relief, pushing its total support to $60 million. “Unless we solve this energy supply crisis, our customers will continue facing high supply costs and increasing reliability risk,” said CEO Calvin Butler. Exelon Corporation
NextEra Energy climbed roughly 1.7% on Friday, with Exelon up around 1.3% and Avista nudging higher by about 0.2%. Despite these advances, the broader utilities ETF fell, indicating that strength in a handful of big players couldn’t counterbalance losses in the rest of the sector.
Avista, headquartered in Spokane, Washington, submitted a four-year rate plan to the Washington Utilities and Transportation Commission on Friday. The utility aims to boost base revenues starting in 2027, proposing an electric increase of $111 million, or 13.9%, and a natural gas hike of $12 million, or 4.7%, according to the filing. Regulators will review the request before deciding on any changes to customer bills.
Investors are closely eyeing Washington for clues on interest rate moves. President Donald Trump indicated he might keep economic adviser Kevin Hassett on board, despite earlier hints that he was leaning toward nominating either Hassett or ex-Fed Governor Kevin Warsh as the next Federal Reserve chair. He said a decision could come “over the next couple of weeks.” Reuters
The trade can flip quickly. Rising Treasury yields often drag utilities down, as investors look for higher returns elsewhere. On top of that, if regulators resist rate hikes, earnings visibility dims—right when utilities face mounting costs for grid upgrades and power generation.
The focus now shifts to Tuesday’s reopening, followed closely by the Federal Reserve’s policy meeting on Jan. 27-28. That event could shift rate expectations and, in turn, affect demand for rate-sensitive utilities.
