AI demand drives best start for US utility stocks since 2019
The S&P 500 Utilities Index gained 7.5% in the first quarter as investors sought defensive assets. Growing power demand for AI data centers boosted the sector.
Utility stocks in the United States have recorded their most significant opening gains in seven years, as investors pivot toward defensive assets amid geopolitical tensions and the rapid expansion of artificial intelligence infrastructure. The S&P 500 Utilities Index climbed 7.5% during the first quarter, marking its strongest start since 2019. This performance stands in stark contrast to the broader S&P 500, which fell 4.6% in the same period—its worst quarterly showing since 2022—as inflation concerns and energy price spikes weighed on the market.
Investors traditionally view the utility sector as a safe haven, offering steady dividends and lower volatility during periods of uncertainty. This defensive rotation was particularly evident during recent conflict involving Iran, though markets have seen some stabilization following a two-week ceasefire agreement.
