XLE rallies 34% YTD as ceasefire hopes ease oil prices

State Street’s Energy Select Sector SPDR ETF (XLE) has risen 34.18% year to date, based on the fund’s net asset value through April 30, 2026. The gain follows a drop in oil prices as market participants weighed the growing possibility of a sustained ceasefire between Iran and the United States. Oil markets experienced heightened volatility earlier after the Strait of Hormuz was closed for several months, with prices moving on conflict-related headlines.

XLE tracks energy stocks in the S&P 500 and is concentrated in large integrated oil companies. ExxonMobil and Chevron together accounted for about 38% of the fund’s portfolio as of May 22, 2026. The ETF carries an expense ratio of 8 basis points and exhibits high trading volume, features that investors and advisors cite when using the fund to adjust energy exposure quickly.

Corporate earnings have supported interest in the sector. Chevron and ExxonMobil reported first-quarter 2026 results that exceeded analyst expectations and returned billions of dollars to shareholders through dividends and buybacks. Those cash distributions increased cash flow for the largest holdings in XLE.

Some investors and advisors are adding tactical energy positions amid concerns about inflation. Historically, higher energy prices have tended to boost revenue and profits for oil producers, which can alter the sector’s performance relative to other parts of the market. The energy sector’s cyclical nature has produced sharp short-term swings, and market participants note that can affect timing for allocations.

Analysts and portfolio managers are monitoring the progress of ceasefire talks and upcoming company reports to gauge how durable the rally may be. For now, the recent easing in oil prices, strong results from top integrated producers and the ETF’s low cost and liquidity align with XLE’s year-to-date performance.