Key Highlights

  • Chevron, a member of the Dow, gained to $206.23, and stockmarketwatch.com also showed it among the Dow's gainers.
  • On Monday, the 10-year Treasury Yield hit its highest level since 2007 as oil-driven Inflation worries rose.
  • For Indian readers, the same oil rally that lifts US energy stocks raises Import costs at home.
  • Oil did the work for energy stocks after crude jumped following Trump's rejection of Iran's plan.

On a day when eight of the 11 S&P 500 sectors fell, energy stocks edged higher on Monday, September 28, joining consumer staples and health care as oil climbed after President Trump rejected Iran's Hormuz plan.

A lonely patch of green

Monday was a sea of red on Wall Street. The S&P 500 fell 59.72 points to 7,683.69, the Dow Jones Industrial Average dropped 347.11 points to 51,481.51, and the Nasdaq Composite lost 248.34 points to 26,820.38. Only 125 of the S&P 500's 503 members advanced.

Yet three sectors managed to rise: consumer staples, health care and energy. Energy's gain was small, but on a day like this, any gain stood out.

Oil did the work

The reason was crude. Over the weekend, President Trump rejected Iran's seven-day plan to reopen the Strait of Hormuz and restart nuclear talks, calling it "unacceptable." Brent traded near $108 in Asia, and West Texas Intermediate spiked by more than $4 early.

Both benchmarks gave back much of that surge as reports suggested Washington could ease some sanctions in exchange for concessions. Still, they settled higher, with WTI around $92.60 and Brent near $105.28. For oil producers, higher prices mean fatter profit margins on every barrel they pump.

The big names

The sector's heavyweights led the way. Exxon Mobil (NYSE:XOM) rose to $162.53, which also pointed to a milestone: the one billionth barrel produced from Guyana's Stabroek block, one of the company's most important growth projects.

Chevron (NYSE:CVX), a member of the Dow, gained to $206.23, and stockmarketwatch.com also showed it among the Dow's gainers. Its move was driven mainly by oil prices rather than fresh company news.

Among smaller names, Barclays upgraded oilfield-services company Liberty Energy (NYSE:LBRT) to Overweight from Equal Weight, with a $27 price target, compared with a stock price of about $18.93. The size of Liberty's move on Monday was not widely reported.

Defensive company

Energy's companions in the green were classic defensive sectors. Consumer staples led the market, with Campbell's (NASDAQ:CPB) among the S&P 500's best performers. Procter & Gamble (NYSE:PG) and Walmart (NASDAQ:WMT) also rose, per stockmarketwatch.com. In health care, Teleflex (NYSE:TFX) was one of the index's top gainers.

The pattern reflects a rotation that Schwab (NYSE:SCHW)'s Liz Ann Sonders has been tracking. She said many stocks have suffered "bear-market level declines," adding: "It's just happened through a process of churn and rotation." Money has been moving from megacap tech and AI hardware into defensive and real-asset sectors.

Energy has a special appeal when inflation fears rise, because producers can benefit from the same higher prices that hurt most other companies. On Monday, the 10-year Treasury yield hit its highest level since 2007 as oil-driven inflation worries rose. TD Securities' Prashant Newnaha said: "President Trump knocking back Iran's offer for diplomacy is driving a renewed rise in oil prices and is weighing on USTs."

For Indian readers, the same oil rally that lifts US energy stocks raises import costs at home.

Energy tracks the US-Iran standoff

Energy stocks will track the US-Iran standoff closely. Any sign of renewed diplomacy could pull oil lower, as it did intraday on Monday, while a further breakdown could push it higher. Hormuz transit counts, which market reports put at 132 for the week of September 21 to 27, compared with about 130 per day before the war, are a key real-world gauge. Wednesday's PCE inflation report and Friday's jobs report will shape the broader backdrop.