LIVE MARKETS-S&P 500 energy sector stoked for a strong 2026?

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S&P 500 ENERGY SECTOR STOKED FOR A STRONG 2026?

Energy .SPNY was a laggard among S&P 500 .SPX sectors over the past couple of years. However, so far in 2026, there's a fire burning under the group. Indeed, Energy is the top-performing sector so far this year.

This, with NYMEX Crude futures CLc1 posting a 6% rise so far in 2026, and NYMEX Natural Gas futures NGc1 surging more than 40%. In fact, Natural Gas futures, with a more than 70% surge just this week, are on pace for their biggest weekly gain ever.

The Energy sector scored a record close on Thursday and is now up 9.43% in January vs. a 0.99% rise for the overall S&P 500. The group is on pace for its biggest monthly gain since March 2024, and on track to rise for a fifth straight week, which would be its longest weekly stretch of gains since an eight-week run that ended in early April 2024.

At Thursday's close of 752.17, Energy is just 0.58% down from its 756.56 April 12, 2024, record intraday high.

Admittedly, the sector has struggled since 2022 in terms of sustaining strength above its 2008 and 2014 highs in the 678.84 to 738.71 area.

However, of note, Bollinger Band Width, a historical volatility measure, on a monthly basis, contracted to a 30-year low in 2025. It's now ticking up in January.

Thus, SPNY would appear to have potential for much more spirited action, if not its next major trend, as what now may be a developing breakout to fresh record highs may lead to surprisingly strong upside momentum.

Meanwhile, Energy bulls are watching the group's relative strength vs. the S&P 500 closely. This comes as the SPNY/SPX ratio appears poised to once again challenge the resistance line from its 2008 high.

(Terence Gabriel)

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