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The rate-sensitive utilities sector was one of Thursday’s weakest groups, as a surge in Treasury yields derailed a four-day rally that lifted the sector off its lowest level since May 2020.
The yield on the benchmark 10-year Treasury jumped 12 basis points to 4.71% and the 30-year yield soared 13 bps to 4.87%, the largest one-day gains for both rates since October 3.
Rates reacted to surprisingly hot inflation data, as the U.S. consumer price index climbed 0.4% for September and 3.7% over the past 12 months, both topping economist expectations and rekindling fears that the Federal Reserve would continue raising rates.
Thursday’s biggest utilities decliners include Eversource Energy (NYSE:ES) -7.5%, Dominion Energy (D) -3.3%, American Water Works (AWK) -3.2%, AES Corp. (AES) -2.5%, NiSource (NI) -2.5%, American Electric Power (AEP) -2.4%, Evergy (EVRG) -2.1%, Southern Co. (SO) -2.1%, Duke Energy (DUK) -2%, Wisconsin Energy (WEC) -2%.
The SPDR Select Sector Utilities ETF (NYSEARCA:XLU) has now dropped 16% YTD, one of the largest annual losses for the sector on record.
