Although the stock markets have had a volatile start to 2026, some sectors are standing out with considerable gains in the new year.
To this end, as of February 2, the energy sector has emerged as the top performer among major stock sectors, posting a year-to-date gain of 12.9%.
The energy sector comprises companies involved in the exploration, production, refining, marketing, storage, and transport of oil, gas, and consumable fuels, as well as providers of related equipment and services. It is split into energy equipment and services, and oil, gas, and consumable fuels, while most renewable energy is classified under utilities rather than energy.
Other sectors have shown mixed results early in the year. In this line, basic materials have followed closely with an 11.58% rise, supported by industrial recovery. Industrials gained 7.59%, while consumer defensive stocks advanced 7.34%.
Communication services rose 3.65%, real estate 2.77%, and utilities 2.76%. Consumer cyclical edged up 1.25%, with healthcare at 0.58%. Financials dipped 0.19%, and technology declined 0.8%, reflecting broader market adjustments.
Why energy stocks are ruling 2026
Overall, the energy sector’s outperformance is being driven by surging electricity demand from the rapid buildout of AI data centers, pushing U.S. power consumption growth to roughly five times the pace of the past decade.
This has benefited power producers, natural gas suppliers, and related services, while nuclear firms have gained from demand for reliable, high-capacity energy to support AI workloads.
At the same time, clean energy has continued to recover, shifting toward demand-led growth rather than subsidy reliance. Renewables, as the lowest-cost and fastest-to-deploy options for peak power, have attracted fresh capital and outperformed traditional fuel segments.
In oil and gas, refiners and midstream operators have remained resilient, supported by operational efficiency and long-term contracts despite crude price volatility. Expectations of price recovery, driven by tightening low-cost supply, have improved earnings outlooks.
At the same time, policy support from the Donald Trump administration for large-scale renewables and domestic production, including LNG exports, has further stabilized the sector and boosted activity.
Featured image via Shutterstock
