The Strategy Session from the Trading Desk at Stipelis
Energy Still Leads
When we step back and examine the market landscape of 2026, one theme rises above almost everything else: energy has become the dominant story. Markets rarely move in unison for extended periods. Leadership rotates from one sector to another, and periods of strength are often followed by periods of weakness. Yet throughout much of this year, energy has consistently remained near the top of the performance rankings.
Today’s trading session offered another example of this ongoing trend. Crude oil traded near $95 per barrel and gained more than 3% on the day. At the same time, equity indexes moved lower, Treasury prices weakened, and precious metals struggled. The contrast between energy’s strength and the hesitation seen elsewhere continues to make the sector worth close observation.
Looking at year-to-date performance highlights just how remarkable the move has been. Heating oil is higher by more than 125%. RBOB gasoline has gained nearly 95%. Crude oil itself has advanced more than 60%. These are not small moves. They represent some of the strongest performances among major futures markets in 2026.
By comparison, even strong performers outside the energy complex look modest. Wheat is up roughly 40%. Soybean oil has gained nearly 40%. Cotton has advanced nearly 29%. Soybeans are up about 26%. While these returns are noteworthy, they still trail the energy sector by a significant margin.
The Energy Index itself reinforces the point. Year to date, it has gained approximately 65%, easily surpassing the broader Commodity Index, which is higher by about 19%. This tells us that commodity strength has not been evenly distributed. Much of the headline performance has been concentrated in a handful of energy-related markets.
One reason this matters is that energy reaches far beyond the energy sector itself. Oil prices influence transportation costs, manufacturing expenses, inflation expectations, consumer behavior, and business planning. Changes in energy prices often ripple through the economy in ways that affect many other asset classes.
That broader influence helps explain why market participants continue to watch crude oil so closely. Even investors who never trade energy futures directly often pay attention because oil can affect conditions in stocks, bonds, currencies, and even agricultural markets.
Today’s market action highlighted these connections. While crude oil pushed higher, most major stock indexes moved lower. The Dow Jones Industrial Average declined 0.38%, the Nasdaq 100 slipped 0.40%, the Russell 2000 fell 0.44%, and the S&P 500 E-mini lost 0.23%.
It would be simplistic to assume that one caused the other. Markets are influenced by many factors at the same time. Still, the divergence is notable because it shows that leadership remains concentrated rather than broad-based. Not every sector is advancing together.
The year-to-date numbers tell a similar story. The Nasdaq 100 remains one of the strongest equity benchmarks, gaining more than 20% this year. The Russell 2000 has gained approximately 14.5%, while the S&P 500 has advanced nearly 13%. These are respectable gains, but they still lag what has occurred in many energy markets.
Another major factor shaping current conditions is the continued rise in interest rates.
The Treasury market remains under pressure as yields move higher across much of the curve. The 10-year Treasury yield recently reached 5.11%, while the 2-year Treasury yield climbed to 4.85%. Longer-dated yields also moved higher, reflecting a market that continues to adjust to a higher-rate environment.
The impact is visible in bond futures performance. Treasury bonds are down more than 8% year to date. Ten-year note futures have declined roughly 6.6%, and five-year note futures are lower by more than 5%.
Bond weakness and energy strength have become two of the defining themes of the year.
At the same time, the U.S. dollar continues to advance. The Dollar Index rose again during today’s session and has gained nearly 3% year to date. Traditionally, a stronger dollar can create headwinds for commodities because many globally traded raw materials are priced in dollars.
Yet crude oil has continued advancing despite dollar strength.
This is one of the more interesting developments in today’s market. When a commodity rises while both yields and the dollar move higher, it often suggests that sector-specific forces remain important. The exact reasons can vary over time, but it highlights that not all market relationships move according to historical tendencies on every occasion.
Volatility data provides another piece of the puzzle.
The VIX closed near 15, a level that remains relatively subdued by historical standards. In other words, the recent weakness in equities has not yet been accompanied by a surge in fear. Investors appear cautious, but not panicked.
However, both the VIX and VVIX have moved higher in recent sessions. VVIX, which measures volatility expectations surrounding volatility itself, often receives less attention than the VIX. Yet rising readings can indicate growing sensitivity to market uncertainty.
While current levels do not suggest severe stress, they indicate that investors are becoming somewhat more attentive to risk conditions.
Market stress indicators tell a similar story. Credit spreads remain relatively controlled, suggesting financial conditions have not deteriorated sharply. However, rising Treasury yields continue to represent an important variable because they influence borrowing costs throughout the economy.
One of the most interesting observations this year is how uneven market performance has become.
Some commodities have produced exceptional gains. Others have struggled.
Coffee is down nearly 21% year to date. Natural gas has fallen roughly 18%. Lean hogs have declined more than 17%. Cocoa, silver, lumber, and several fixed-income markets have also registered losses.
This contrast reminds us that commodities are not one market. Each responds to its own unique combination of economic, weather, supply, demand, political, and financial influences.
That distinction is important because broad labels can sometimes hide critical details. Saying that “commodities are strong” tells only part of the story. Energy has been extraordinarily strong. Several agricultural products have been strong. Other markets have experienced weakness.
Understanding those differences helps create a more complete picture of market behavior.
The same principle applies within equities. Large-cap growth stocks, small-cap companies, and various sectors have not all performed equally. Leadership has concentrated in specific areas while other segments have lagged.
Taken together, the evidence points toward a market environment defined by selective strength rather than universal participation.
Energy remains the clearest example.
It continues to lead major performance rankings. It continues to influence conversations about inflation, economic activity, and market positioning. And it continues to attract attention even when many other sectors struggle to establish direction.
That does not mean the trend will continue indefinitely. Markets change. Leadership rotates. Conditions evolve.
But the purpose of market analysis is not to predict outcomes with certainty. It is to understand what is happening right now and identify the forces that appear most influential.
At this moment, the message from the data remains relatively clear. Energy continues to occupy a leadership role across the commodity space. Rising yields remain an important feature of the financial landscape. Equity markets have recently become more cautious. Volatility has increased modestly without reaching extreme levels.
Those themes together tell the story of today’s market environment.
And for now, energy remains at the center of that story.
Stephen Coleman – The Head Market Strategist on the Trading Desk at Stipelis