Why Are Utility Stocks Falling While the Market Sets Records? It Isn’t Rates This Time
Research note. Computed from daily closes in our maintained TradeStation price database (XLU and SPY from 1999, the 21 individual utilities from 2010) and the 10-year Treasury constant-maturity series. Both historical studies are frozen through August 10, 2026; the latest readings and charts continue to update. See How we checked it.
Utilities are falling on their own, and the usual suspect has an alibi. Over the eleven sessions ended August 10, every one of the 21 large utilities we track fell — WEC Energy for eleven straight closes — while SPY set records and the 10-year Treasury yield finished the window roughly where it started. The history of comparable stretches leans toward recovery over the following quarter, with exceptions this page names.
- XLU fell 6.8% over eleven sessions while SPY closed within 0.1% of its record — the fifth such divergence since 1999.
- Six of the eight comparable XLU slides since 2023 came with the 10-year up 17–40bp. This one came with it slightly down.
- Across 43 nine-day-plus utility losing streaks since 2010, the next quarter averaged +4.9% with 31 of 41 positive, versus a +2.1% sector baseline.
- The four completed record-market divergences split two up, two down. Rare is not the same as reliable.
Eleven red closes in a row, and not just one stock
WEC Energy, a $35-billion Midwest regulated utility, has not had a single up day since July 24. Eleven consecutive lower closes. CMS Energy, its Michigan neighbor, is at nine. Alliant and Atmos are at five. And the breadth of the move matters more than any single streak: all 21 large utilities in our database fell over the window, from a 3.4% decline in PPL to more than 10% in NiSource. The sector ETF (XLU) lost -1.4% and now sits -10.4% from a 252-session high it set back in February.
The market around it, meanwhile, was setting records. SPY closed the window -1.6% of its all-time high, our Fear & Greed Index printed 78 — Extreme Greed — and the prior week produced a 5.7% four-day thrust. Utilities were not dragged down by a falling tape. They were sold into a rising one.
All 21 utilities, 11-session scoreboard
Live — updates with each close. Sorted by current losing streak.
The rates alibi fails this time
Utilities carry heavy debt and pay bond-like dividends, so the reflexive explanation for any utility selloff is yields. It usually fits. Of the eight times since 2023 that XLU fell 6% or more over eleven sessions, six came with the 10-year Treasury yield rising between 17 and 40 basis points inside the same window — the 2023 rate shocks, the January 2024 repricing, the May 2026 slide.
This window, the 10-year went +6bp (yield data through the series’ latest print, one business day behind the equity closes). No duration math turns a flat 10-year into a 7% sector decline. Whatever sold the utilities, it was not the bond market — and it was not defensives broadly either: over the same stretch consumer staples rose +1.0% and health care set a 52-week high. The selling is specific to utilities and, in a milder form, real estate.
What the price data supports saying: this is concentrated, sector-specific distribution during a risk-on tape, in the year’s weakest major sector — XLU is up about 1% in 2026 against SPY’s 13% — and it happened without a rate shock. What the price data cannot do is name the seller or the reason. Candidates include profit-taking rotation into the record-setting growth trade and repricing of the sector’s data-center demand story, but those are interpretations, not measurements.
A bleed this fast is rare outside crises
Only the fifth record-market utility slide since 1999
Down-6%-in-eleven-sessions is not rare by itself — it has happened on 11 days since 1999, mostly inside 2008, 2020, and other broad selloffs. The rare part is doing it while SPY closes within 1% of a one-year high. Cluster qualifying days that sit within 21 sessions of each other and the full history contains five episodes: February 2015, December 2017, January 2024, December 2024, and the one that started August 10, 2026.
Every episode since 1999, anchored on its first qualifying day.
Four completed episodes is a pattern, and a thin one. They split evenly: after February 2015 and December 2017 the sector kept falling over the next quarter (-6.1% and -3.6%), and after January 2024 and December 2024 it recovered (+11.3% and +1.4%). The divergence alone tells you the setup is unusual. It does not tell you the direction. For that, the larger sample is the streaks themselves.
What 43 long utility losing streaks did next
Since 2010, the 21 utilities have produced 43 losing streaks of nine sessions or more — including 2 still running as of August 10, 2026. Of the 41 with a complete next quarter, the average return from the streak’s last down close was +4.9% over the following 63 sessions, with 31 of 41 positive. The pooled sector baseline over the same years is +2.1% with 63% positive. Over 21 sessions the pattern is the same in miniature: +2.4% after streaks against +0.7% baseline.
Two honesty notes before anyone trades that. First, the 43 streaks are not 43 independent events — they cluster in shared sector selloffs (October 2016 alone produced five, the rate scare of May 2023 four, last December three), so the effective sample is smaller than the count. Second, the tail is real: the worst completed case, Xcel after its November 2020 streak, lost another 13.9% over the following quarter, and seven other cases were negative. The record says long utility streaks usually exhausted the selling rather than started it. Usually is doing honest work in that sentence.
The bleed in context: utilities vs the market, one year
What I’d actually watch
I would not buy utilities just because the streak counter reads eleven — and would not read the bleed as a market warning either, since equal-weight breadth is at records and the Hidden Bear Index shows the average stock at its highs. The historical lean is mean reversion inside the sector, so the honest posture is a watchlist. It is not yet a position. Three things settle it. If XLU is still below its August 10 close by early November, this episode joins the 2015/2017 half of the table and the divergence was distribution, not exhaustion. If the 10-year pushes through its late-July high near 4.75% while the sector keeps bleeding, the rates story re-enters and this page’s premise weakens — track it on Treasury Yields. And if the selling spreads to staples and health care, it stops being a utilities story and becomes a defensives story, visible any day on sector performance.
How we checked it
The utility sample is the 21 large regulated utilities in our price database with continuous history since 2010, listed in the scoreboard above; W.P. Carey is excluded as a REIT. A losing streak is a run of consecutive closes below the prior close; forward returns are measured from the streak’s last down close and graded only where the full 21- or 63-session window exists. The pooled baseline samples every fifth trading day across the same 21 names and years. Streaks that overlap in time share sector moves and are not independent observations.
The divergence study uses XLU’s 11-session price return at or below −6% while SPY closed within 1% of its trailing 252-session closing high; qualifying days within 21 sessions of each other merge into one episode anchored on the first day. Ten-year yield changes use the constant-maturity series from our treasury-yields file, matched to each equity date at the latest print on or before it (the series publishes one business day behind). All figures are price returns, not total returns — a real limitation for a dividend sector, stated rather than hidden: total-return streaks would be slightly shorter and forward returns roughly a percentage point higher per quarter. Both studies are frozen through August 10, 2026; only explicitly labeled live exhibits update.
Frequently asked questions
Why are utility stocks falling right now?
Between late July and August 10, 2026, all 21 large regulated utilities we track fell between 3% and 10% over eleven sessions, with WEC Energy down eleven consecutive closes. The 10-year Treasury yield was roughly flat over the same window, so the usual interest-rate explanation does not fit. The price data shows concentrated selling in one sector during a strong, record-setting tape; it cannot prove a single cause.
Are utilities falling because of rising interest rates?
Not this time. Utilities often trade like bond proxies, and six of the eight utility-sector slides of comparable size since 2023 came with the 10-year yield rising 17 to 40 basis points inside the same window. During the current slide the 10-year net change was a few basis points. The rate move is far too small to account for a 7% sector decline.
Is a long utility losing streak a buy signal?
Historically the tendency leaned toward recovery, with exceptions. Across 43 losing streaks of nine or more sessions among 21 large utilities since 2010, the average return over the next quarter was +4.9% and 31 of 41 completed cases were positive, versus a +2.1% sector baseline. Streaks cluster during shared sector selloffs, so those cases are not fully independent, and the losers included a −13.9% quarter.
How rare is a utility selloff while the market is at record highs?
Rare. Since 1999 there have been only five stretches — 2015, 2017, 2024 (twice), and the current one — in which the utility ETF XLU fell 6% or more over eleven sessions while SPY closed within 1% of a one-year high. The four completed cases split evenly: utilities kept falling over the next quarter twice and recovered twice.
Are utilities still a defensive sector?
Their long-run behavior is defensive, but this episode was not a defensives-wide rotation: over the same eleven sessions consumer staples rose about 1% and health care set a 52-week high, while utilities fell 6.8%. The selling was specific to utilities and, to a lesser extent, real estate, rather than a move out of defensive sectors broadly.