Utilities stocks—those companies providing essential water, gas, electricity, and similar services—are a haven for investors when other sectors become too risky. The reasoning behind this is that there will always be relatively consistent demand for utilities services, even when the broader market is struggling.
As recession fears heat up in early 2025, utilities stocks have climbed as well. As of March 7, 2025, the benchmark Utilities Select Sector SPDR ETF (NYSEARCA: XLU) climbed by nearly 21% in a year's time. For comparison, the S&P 500 achieved only roughly half of those gains in the same time period. While this ETF's performance is essentially flat year-to-date as of the same day, that nonetheless beats the broader market, which has declined by about 3% in the same timeframe.
