Key Highlights

● Energy was among the S&P 500's top-performing sectors.

● Crude settled back above $100 a barrel.

● Refiners and oilfield services names led the gains.

● Higher oil complicates the inflation picture for the Fed.

Energy stocks had a strong day, riding a rally in crude oil that pushed prices back above the $100 mark. The sector finished among the top performers in the S&P 500, alongside technology, with West Texas Intermediate crude settling higher and Brent crude, the global benchmark, also climbing.

Geopolitics was the main driver, as Yemen's Houthis claimed a ballistic-missile attack on a Saudi refinery, a claim Riyadh has not confirmed, and analysts also flagged the risk of renewed US strikes on Iran after upcoming midterm elections.

Who Led the Sector

Refiners were in focus during earnings season, with Phillips 66 climbing after reporting a strong third quarter with high refinery utilization and a dividend increase, while an oilfield services company rose after its revenue beat, with its power unit negotiating hundreds of megawatts of data-center work.

That shift points to a broader theme: energy companies finding new demand from the AI boom, a trend one strategist summed up by describing AI compute as a natural gas demand story.

The Inflation Question

Higher oil is a double-edged sword, since it helps energy producers but can feed inflation and squeeze consumers, with the Federal Reserve holding rates steady but saying in its statement that inflation remains elevated, and market odds of a December rate hike rising after the meeting.

Supply data added support too, with the Energy Information Administration reporting that US crude inventories fell by more than expected last week.