Tech stocks are getting all the attention on Wall Street right now, but the best-performing sector year to date is still energy. The State Street Energy Select Sector SPDR ETF (XLE +0.60%) is up 32% so far in 2026, which easily tops the S&P 500’s (^GSPC +0.37%) 8.8% return and the 23% return of the State Street Technology Select Sector SPDR ETF (XLK +1.00%).
But all of those gains came during the first quarter of the year. So far in Q2, the XLE ETF is down about 2%, making it the second-worst-performing sector, behind only utilities.
The narrative right now is almost entirely around the Iran war. As tensions escalate and oil prices rise, energy stocks tend to rise as well and vice versa. That’s an environment that can create a lot of volatility with little sustainable upside to show for it.
As we head into summer with the timeline for an Iran war resolution still unknown, is the…
