Utilities stocks suffer worst day since 2020 as Treasury yields resume climb

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Utilities stocks suffer worst day since 2020 as Treasury yields resume climb
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The S&P 500 utilities sector falls to its lowest since June 2020 as Treasury yields resume their climb.

The S&P 500 utilities sector XX:SP500.55 declined by 4.7% on Monday, closing at its lowest level since June 2020 as Treasury yields resumed their climb after the U.S. government averted a weekend shutdown.

Exchange-traded funds that target stocks in the utilities sector saw sharp drops with the Utilities Select Sector SPDR ETF XLU down nearly 4.7% on Monday to suffer its worst day since April 2020, according to FactSet data. The Vanguard Utilities ETF VPU and the iShares U.S. Utilities ETF IDU tumbled 4.6% and 4.3%, respectively, according to FactSet.

Unlike fast-growing technology stocks, utilities stocks are often considered dividend-income investments or defensive holdings, especially during economic downturns or recessions. The companies that provide electricity, water and gas utilities usually offer investors stable dividends, as well as less volatility compared with the overall stock market.

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