Key Highlights

● The S&P 500 utilities sector rose firmly as one of six sectors to finish higher.

● The 10-year yield dipped below a key level for the first time since September 22.

● NextEra Energy said it sees full-year results at the top of its guidance range.

● Regulated utilities climbed while AI power-build-out names such as Vistra and GE Vernova were sold.

Utility stocks were among the clear winners on Thursday, October 22, as Treasury yields tumbled and investors rotated out of technology and into the market's traditional safe havens.

The S&P 500 utilities sector rose firmly, one of six sectors to finish higher on a day when the broader S&P 500 slid 93.74 points to 7,663.43, its worst day since July.

The bond market did the heavy lifting

The bond market set the backdrop. Treasuries rallied hard, and the 10-year yield closed back below a closely watched threshold for the first time since September 22. Estimates of how rare the move was varied, with some pointing to the biggest one-day drop in the 10-year yield since August 2025, and others to March 2023 or "over two years."

Utilities are often treated as bond substitutes. They pay relatively steady dividends, carry heavy debt loads to fund power plants and grids, and tend to trade inversely to yields. When Treasury yields fall, the income from utility shares looks more appealing by comparison, and the cost of financing their large capital programs eases.

"Treasuries rallied overnight as tech stocks came under pressure amid renewed AI valuation fears," one rates strategist said.

The bond rally held even as oil climbed. "If oil is about to spark an inflation wave, the bond market hasn't heard about it," one market commentator said. Brent crude settled at $113.17, its highest since May 4.

NextEra, Duke and Dominion caught a tailwind

Company news added to the momentum. NextEra Energy (NYSE:NEE) rose after reporting third-quarter results on Wednesday and saying it sees full-year results at the top of its guidance range. One quote showed the stock around $81.90.

NextEra and peers also benefited from reports that a blockade on wind projects was easing. Duke Energy (NYSE:DUK) and Dominion Energy (NYSE:D) also rose on the wind news. PG&E (NYSE:PCG) reported third-quarter results before Thursday's open.

Not every power stock joined in

The rally had a sharp dividing line. Regulated utilities climbed, but companies tied to the AI power build-out were sold hard. Vistra (NYSE:VST), a power producer caught in the AI-power selloff, tumbled, trading around $140.6 midday after trading at $156.14 on Wednesday. One bank trimmed its price target on Vistra by just $1, to $226, and kept an Overweight rating.

GE Vernova (NYSE:GEV) plunged to $827.42, one of the three worst performers in the S&P 500, as Meta's heavy spending plans stoked worries about financing for AI data centers. Eaton and Vertiv also fell.

Consumer staples posted their best day since April 2025 and health care hit a record, while about two of every three S&P 500 stocks rose, according to market data.

The Fed and PCE Test for Utilities

The next test for rate-sensitive stocks is the Federal Reserve. The FOMC meets October 27–28 and announces its decision on Wednesday, October 28. Market pricing for a hike at that meeting fell on Thursday.

Third-quarter GDP and September PCE inflation data arrive on October 29. Any sign that rising energy costs are feeding into broader inflation could push yields back up and test the utilities rally. Investors will also watch whether the easing of the wind-project blockade holds.