Entering 2026, forecasts for the performance of the energy sector were tempered, with analysts pointing to a global oil surplus and consequently weaker demand. After mustering a gain of just 8.7% in 2025—good for fourth worst among the S&P 500’s 11 sectors—expectations remained low this year.
But as the market continues to rotate out of tech stocks, defensive sectors continue to benefit from investors’ flight to safety. Chief among them is energy, which has led the index with a year-to-date (YTD) gain of more than 18%.
