US Energy Stocks Buck Dismal Trend with ‘Massive Outperformance’

The strong performance of oil and gas stocks in the first half of 2022 marked a stark change in fortunes for a sector that has been on the ropes for years.

Myles McCormick and Nicholas Megaw, Financial Times
US Energy Stocks Buck Dismal Trend with ‘Massive Outperformance’

The Ukraine war fueled a 29% first-half rise for the S&P 500 energy sub-index, comprising 21 big oil and gas groups, as the wider market suffers the worst six months in 50 years. (Source: Shutterstock.com)

Oil and gas companies were the only bright spot in a dismal first half of the year for the U.S. stock market as the energy sector benefits from soaring commodity prices fueled by the war in Ukraine.

The S&P 500 energy sub-index, comprising 21 big oil and gas groups, jumped by almost a third in the first six months of the year, bucking a trend in which the wider market recorded its worst half in more than 50 years.

The 29% rise added more than $300 billion in market capitalization to the sector, while the broader index shed more than $8 trillion, or 21%.

“That is a massive, massive outperformance,” said Pavel Molchanov, an analyst at Raymond James. “To state the obvious—energy is the best performing sector of the equity market year to date.”

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