The Utilities Select Sector SPDR ETF (XLU) fell 6% last month, marking its steepest monthly drop since 2023, now trading about 17% below its 52-week high. Rising 10-year Treasury yields above 5.2% have made bonds more attractive than XLU's 3.05% yield, prompting income investors to shift away from utilities. Additionally, a federal regulator's five-month hold on a major grid operator's backup capacity purchase has hurt independent power producers within the fund. Analysts warn XLU could fall further, possibly down to $35.50-$36.50. Despite price declines, XLU's payout ratio of 58% offers a dividend buffer, making it suitable for long-term income investors willing to endure volatility, though it currently underperforms bonds in yield and price stability.
XLU trades at USD 39.78 on Pluang as of Oct 03, 2026 03:02 WIB, showing a slight 0.25% gain in one day. The fund's price remains below its 52-week high of USD 47.73. Investors on Pluang hold XLU for an average of 80 days, with current order activity fully on the buy side.
Utilities stocks have fallen due to the fastest rise in Treasury yields since 1994, which pressures their dividends and valuations. However, the sector benefits from strong, long-term AI-driven power demand as tech giants secure power deals for data ...
Recent options activity indicates a potential slowdown in the U.S. bond sell-off. A notable $1 million options trade in the State Street Utilities Select Sector SPDR ETF (XLU) bets the sector will stabilize or rally, reflecting belief that rising rat...
