After U.S. energy stocks rose by 21% at the beginning of the year, historical patterns indicate that the bullish trend will continue!

Since the beginning of the year, oil company stocks have risen significantly - analysts believe this is a positive signal for the trend of the oil market for the rest of the year. The S&P 500 Energy Index has risen by about 21% year-to-date, exceeding all other sectors. According to data from Bespoke Investment Group, this is the second strongest start since 1990, second only to 2022. In 2022, as the global economy recovers from the pandemic, oil prices have soared. For energy stocks, a strong start often leads to a strong finish: according to data compiled by Bespoke Investment Group, in the past, the energy sector has risen by at least 15% in the remaining years after rising by 10% from the beginning of the year to mid-February. Investors are also paying more attention to this trend: data shows that in January, they invested $2.6 billion in the iShares Energy Select Sector SPDR ETF, the largest amount since 2008. Since the beginning of the year, oil prices have continued to rise due to ongoing geopolitical tensions in Iran, stricter sanctions on Russian exports, and the risk of disruptions to major shipping routes. DataTrek Research's strategist compared the relative performance of the energy sector with the S&P 500 Index and came to a similar conclusion. Data from DataTrek shows that since 2015, there have been seven instances where the energy index outperformed the S&P 500 Index by at least 20.9 percentage points over a 50-day period, and each time in the following 50 days, the energy index continued to outperform the S&P 500 Index. In addition, DataTrek co-founder Nicholas Colas wrote that the weight of the energy sector in the S&P 500 index is slightly above 3%, providing investors with ample room to increase their exposure to this industry in their portfolios. He wrote, "The energy sector is one we will never recommend reducing in the S&P 500 index components. During geopolitical or oil crises, it is often the only sector that rises." However, on Thursday, due to a market downturn, the prices of these companies also fell, and the momentum stalled. There are many uncertainties related to the economy, geopolitics, and even the impact of artificial intelligence, which could potentially break the historical trend in 2026.