XLU Stock Recent News

Utilities have become attractive investments due to cheaper valuations and improved fundamental growth. The utilities sector has underperformed recently, but there is potential for higher returns in the future. Certain utilities stocks, such as Pinnacle West, Duke Energy, and Dominion Energy, are well-positioned to capture growth in electricity demand.

Most Wall Street analysts are getting bullish on the S&P 500 due to the earnings strength, the AI boom, the broadening of market strength, inflation that is sticky but not accelerating and decent US economic growth.

There are two sets of stories driving Utilities Select Sector SPDR Fund ETF's rally. One involves the potential for interest rates to fall. The other involves the soaring demand for electric power due to AI, factory automation, electric vehicles, etc.

Utilities are facing severe short-term headwinds. However, the sector enjoys very attractive long-term tailwinds, prompting some of today's leading investors to pour trillions of dollars into the sector. We examine different ways to invest in the sector, including offering our take on Utilities Select Sector SPDR® Fund ETF as a vehicle for investing in utilities.

In April, inflationary pressures showed signs of easing, with the Consumer Price Index on a "core" basis rising 3.6% year over year, in line with expectations.

The utilities sector just broke out of its multi-year downtrend, confirming a significant change of character and shift in momentum. The sector, which has certainly taken a back seat to other sectors in recent years, like technology and in-play artificial intelligence stocks, is now firmly in the driving seat.

Investors are flocking to defensive sectors like utilities and consumer staples in search of cheap stocks. Amid such scenario, these ETFs could be solid picks to tap the sector rotation.

The utility sector, which tends to outperform when the economy is in a downturn, is making the most of the current volatility and uncertainty triggered by the timing of the Fed rate cuts, slowing economy and geopolitical tension.

The artificial intelligence hype reaches far beyond big tech.

The utilities sector (represented by XLU) has been outperforming in 2024. XLU is expected to benefit from a moderate risk-off environment, leading to sector rotation. Steady earnings growth, rising distributions, an attractive valuation and the prospect of lower rates are all potential tailwinds. The chart has a bullish pattern and a target price of $77.