Energy stocks are staging a historic rally, defying broader market weakness and drawing strong investor inflows as geopolitical tensions reshape sector leadership.
The U.S. Energy Select Sector Index (XLE) has risen for 14 consecutive weeks, marking the longest winning streak on record and surpassing the previous 10-week stretch in 1998, according to a Goldman Sachs note.
The index has gained more than 40% over the period, driven by tensions around Iran and disruptions to global energy flows.
Investor positioning has shifted alongside price action. Roughly $5.5B has flowed into the Energy Select Sector ETF (XLE) during the streak, Goldman Sachs said, reflecting a rotation out of technology and AI-linked stocks earlier this year.
Energy equities have also recorded 25 all-time highs year-to-date, the most in a single year since 2007, underscoring the strength of the rally.
The surge comes even as broader U.S. equities remain under pressure, with hedge funds cutting exposure and sentiment subdued. Elevated oil prices and persistent geopolitical risks are reinforcing energy’s appeal as investors seek exposure to inflation-linked and defensive sectors.
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