Natural gas stocks started the new year with a "sizzling start", with the S&P 500 energy sector leading the way in a counterattack.

In early 2025, the energy sector is the star sector of the S&P 500 index, breaking free from two consecutive years of market underperformance. Despite a dim outlook on oil and gas stocks on Wall Street, the energy sector continues to rise. The S&P 500 Energy Index has risen 2.2% year-to-date, leading all 11 sectors of the S&P 500 index, surpassing the index's overall energy sector gain of 0.4%. BTIG analyst Jonathan Krinsky stated in a report that due to the strong performance of natural gas stocks, the energy sector has gone from "worst to first", with natural gas stocks demonstrating a clear leadership role as commodity prices rebound from multi-year lows. So far, the First Trust Natural Gas ETF has risen 3.8% in 2025, outperforming the overall energy index of the S&P 500. Krinsky pointed out that in the past two years, energy was the only declining sector in 2023 and 2024, while the S&P 500 index rose by 53%. Despite concerns on Wall Street about the outlook for oil and gas stocks, the stock market has seen an increase. Royal Bank of Canada Capital Markets downgraded the sector from "overweight" to "hold" on Wednesday, with Lori Calvasina, head of US stock strategy research at the institution, saying the analyst at the bank is "most pessimistic about the global energy sector." Ned Davis Research also downgraded the sector's rating in December last year, citing difficulties in maintaining a rise in oil prices. With market demand sentiment continuing to remain low, Brent crude prices may further decline. The top ten Wall Street banks, including Bank of America, Morgan Stanley, JP Morgan, Goldman Sachs, and Citigroup, still expect Brent oil prices to fall further to around $70 per barrel by the end of this year.