Utilities Up on Defensive Bias — Utilities Roundup

Shares of power producers rose as traders rotated into the sector for defensive reasons.

Violent volatility in the utility sector in recent weeks reflects the sector's dual identity, said one strategist.

"As uncertainty rose from various difficult angles, and obviously with the Iran conflict...maybe you should see some movement toward more defensive instruments," said Alex Kania, utilities analyst at brokerage BTIG. "At the same time, utilities are seen as bond proxies. [There's] this idea that: If Treasury yields go up, then utility dividend yields need to rise as well in order to maintain that spread." So, as inflation fears sparked by the oil spike drove up Treasury yields, utility stocks dropped so that their yields would rise accordingly, Kania said.

Rising gasoline prices for utility fleets and higher costs of electric-infrastructure materials could also be a challenge for business fundamentals, said Kania. "The inflationary environment is a potential pressure for utilities' costs," Kania added. "They might go up more quickly than they can go through the rate-case cycle, and that might pressure earnings power."

Write to Rob Curran at rob.curran@dowjones.com

(END) Dow Jones Newswires

March 24, 2026 17:49 ET (21:49 GMT)