The article discusses the current state of the State Street Energy Select Sector SPDR ETF (XLE), noting that while it has performed well in 2026 due to rising energy prices amid the Iran war, its performance has stagnated recently, and earnings growth is expected to turn negative in 2027. The author advises caution in investing in energy stocks due to geopolitical uncertainties and potential declines in oil prices.
Given the expected downturn in earnings growth for the energy sector and the likely decline in oil prices once the Iran conflict is resolved, the State Street Energy Select Sector SPDR ETF (XLE) presents more downside risk than reward at this time. Consider avoiding or minimizing exposure to XLE in your portfolio until geopolitical and market conditions stabilize.