S&P 500 hits record as tech surges 2.5% and utilities slide 3%

The S&P 500 rose 0.4% to 7,611, extending its longest winning streak of 2026, as a rotation from utilities to tech pushed the Nasdaq to a record.

The utilities sector's 3% decline was its steepest since March 20, when it fell 4.1%, according to Dow Jones Market Data. The group has now fallen for five straight sessions, losing 4.5% over that stretch — its longest losing streak since the six-session slide that ended Dec. 8, 2025.

The rotation was broad. The S&P 500 information technology sector gained 2.5%, while the energy sector rose 1.9% after President Donald Trump said Iran nuclear talks were back on. Consumer discretionary was the second-worst performer, falling 2.6%, while telecommunications dropped 1.6%. The Russell 2000 index of small-cap stocks slipped 0.1% to 2,912, lagging the large-cap benchmarks. Among industry ETFs, the Global Tech Index ETF rose about 3%, while the Utilities ETF fell a similar magnitude.

The divergence marks a decisive shift in market leadership after utilities had outperformed through the first five months of 2026 as investors sought shelter from tariff uncertainty. Monday's move suggests risk appetite is returning, with all three major benchmarks — the S&P 500, Dow Jones Industrial Average and Nasdaq 100 — at or near record levels.

Utilities Selloff Deepens as Rate Sensitivity Bites

The S&P 500 utilities sector closed at 438.75, its lowest since Feb. 5, according to Dow Jones Market Data. The subsector's 3% decline outpaced even the consumer discretionary drop, a reversal from the defensive tilt that dominated early 2026 positioning. The group's five-day losing streak has erased 4.5% of value.

The selloff coincided with a broader reassessment of rate-sensitive sectors. Utilities, which carry high debt loads and are valued partly for their dividend yields, become less attractive when bond yields rise or when the rate-cut timeline extends. Monday's move suggests traders are pricing in a higher-for-longer rate environment, reducing the premium investors assign to defensive income plays.

The energy sector's 1.9% gain provided the clearest cross-asset signal. Trump's announcement that Iran talks were back on lifted oil prices and energy stocks even as the broader market rotated toward growth-oriented names. The divergence between utilities and technology — a gap of more than 5 percentage points — was the widest of any single session this year.

The S&P 500's winning streak — its longest of 2026 — and the Nasdaq's record close highlight the market's appetite for growth exposure. The Dow Jones Industrial Average rose 0.2% to 51,100, also extending its winning streak. All three major benchmarks are now at levels that will be watched as resistance tests in the sessions ahead.

The next test for direction is Friday's May employment report, which will determine whether the rotation from defensives to growth has further room to run. A soft payrolls number would reinforce the rate-cut narrative that benefits growth stocks; a hot print could reverse Monday's rotation and send investors back into defensive sectors.

This article is for informational purposes only and does not constitute investment advice.