Energy, basic materials, and defensive consumer stocks are in. Tech and financials are out. That, at least, is Mr. Market’s view so far in 2026, based on a set of US equity sector ETFs through yesterday’s close (Feb. 10).
Stocks in the energy patch continue to lead the field by a solid margin. is up nearly 20% year to date. In addition to leading the other equity sectors, dramatically so in several cases, these shares have also left the broad stock market in the dust in 2026’s early going, based on the SPDR S&P 500 ETF (NYSE:SPY), which is up just 1.5% this year.
Following a lackluster performance in 2025, Big Oil and other energy stocks are roaring. One theory is that the Venezuela factor lit a fire for expectations. Following the removal of the country’s leader, Nicolás Maduro, by US forces on Jan. 3, the energy sector has been on a tear.
Coincidence? Maybe, although energy bulls argue that investors anticipate that a new governing regime in Venezuela could enable US companies to resume work on rebuilding the country’s oil infrastructure, creating new business opportunities in the process.
The degree of opportunity remains debatable, but market sentiment for now seems to be leaning into the possibilities. Skeptics note that Venezuela’s political environment is historically volatile, and even under the best of circumstances, it will take years for Venezuela to recover its energy-output mojo.
Another risk: Companies may hesitate until they see durable legal protections. Exxon Mobil’s (NYSE:XOM) CEO last month told President Trump that Venezuela is “uninvestable” and the needs to transition to democracy before energy firms can rationalize investing in the nation’s degraded oil industry.
Posting a strong second-place performance this year: . Holding a portfolio of mining stocks and other firms that focus on basic materials and chemicals, XLB has surged nearly 17% this year, nearly doubling its performance for all of 2025.
Tied for third place for sector results this year: and . Each fund is currently higher in 2026 by 12%-plus.
Meanwhile, the formerly high-flying and are underwater this year.
It’s still debatable if the sharp change in sector leadership is a sign of durable trend for the foreseeable future, but for now Mr. Market’s attention has shifted in a non-trivial degree.