Regulated utilities such as NextEra Energy, Dominion Energy, and others face bearish pressure due to rising long-term interest rates driven by ongoing Fed quantitative tightening. These companies, which rely heavily on capital expenditure and trade partly as bond proxies, are seeing increased interest expenses and valuation compression as Treasury yields climb. Although demand growth and long-term earnings projections remain positive, the widening income gap between utility yields and risk-free Treasuries challenges their appeal to income-focused investors. The outlook depends on whether long-term rates stabilize or continue rising, with potential downside if rate hikes persist and no Fed easing occurs soon.
