Energy sector led S&P 500 with broad-based buying. Crude held near $85. Exxon and Chevron powered gains. Ten sectors declined. Traders said rotation favors commodities.
Energy was one of just three S&P 500 sectors to close higher Thursday. It was the only one with positive net breadth on the day.
Crude oil settled near $85 a barrel. West Texas Intermediate has gained 18% this year.
Exxon Mobil and Chevron each rose more than 1%. Together they accounted for roughly half the sector's total gain.
Ten of 11 sectors declined. Utilities and consumer staples also closed higher. Within those groups, more stocks fell than rose. Energy's net breadth was positive by a wide margin, traders said. The buying was broad-based, not concentrated in a few large names.
That pattern has held for most of the quarter. OPEC+ production cuts now extend into the third quarter. U.S. refineries are running near 95% of capacity, supporting steady demand. The Energy Information Administration reported a smaller-than-expected crude draw last week. Traders said the focus has shifted to supply constraints rather than weekly inventory swings.
The sector trades at roughly 12 times forward earnings. That compares with the S&P 500's 21 multiple. Energy earnings estimates have been revised higher for five consecutive months. Several fund managers said the gap has drawn value-oriented buyers.
For the broader market, energy's outperformance signals a rotation that has been building since April. Traders said the shift favors sectors with pricing power tied to physical commodities rather than discretionary demand. The S&P 500 fell 0.6%. Technology and consumer discretionary stocks weighed.
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