Utilities, Energy, and Banks: The Forgotten Sectors Quietly Defying the Tech Meltdown

While the market’s attention is glued to the carnage in tech and the crypto rollercoaster, something quietly subversive is happening in the so-called ‘boring’ sectors. Utilities, energy, industrials, and banks, the unloved stepchildren of the last bull run, are refusing to follow tech into the abyss. In a week where AI darlings and software names are getting their faces ripped off, these old-economy stalwarts are quietly holding the line, and in some cases, even eking out gains. For traders who can’t stomach another round of AI panic, this is the rotation that matters.

Let’s get the facts straight. Tech stocks have been the market’s engine since October 2022, but the wheels are coming off. Software stocks are in a rout, the S&P 500 is teetering, and even crypto can’t decide if it wants to implode or moon. Yet, according to seeitmarket.com’s latest analysis, the ‘real economy’ sectors, utilities, energy, industrials, and banks, are showing resilience. Utilities are flat to slightly up on the week, energy is holding firm despite oil’s lackluster performance, and banks are weathering the Fed drama with surprising composure. This isn’t just a random blip. It’s a signal that the market’s risk appetite is rotating, not evaporating.

The context is crucial. For most of the past two years, the only game in town was tech and AI. Everything else was left for dead. But with the Fed’s regime change looming and job openings at their lowest since 2020, the narrative is shifting. Investors are finally asking whether it makes sense to keep paying nosebleed multiples for companies that may never turn a profit, while ignoring sectors that actually generate cash flow. The last time we saw this kind of rotation was in the aftermath of the dot-com bust, when value stocks staged a multi-year comeback. The parallels are hard to ignore.

What’s driving this stealth bid for ‘boring’ sectors? Part of it is simple math. Utilities and energy companies throw off dividends and have real assets. Banks, for all their flaws, are still the plumbing of the financial system. When growth gets shaky and volatility spikes, these sectors look a lot less boring and a lot more like safe havens. There’s also the policy angle. With Kevin Warsh’s nomination for Fed chair, the market is bracing for a more hawkish tilt. That’s bad news for unprofitable tech, but a boon for banks and energy. If rates stay higher for longer, the yield curve steepens, and banks finally get paid for taking risk again. Meanwhile, utilities benefit from defensive flows, and industrials ride the tailwind of any infrastructure push.

The real story is that this rotation is just getting started. Positioning data shows that institutional flows into utilities and energy ETFs have picked up, while tech outflows are accelerating. Bank stocks, left for dead after the 2023 mini-crisis, are quietly outperforming the broader market. Even as the headlines scream about AI and crypto, the smart money is moving elsewhere. This isn’t a wholesale flight to safety. It’s a tactical rotation, out of hype and into cash flow.

Strykr Watch

Technically, the utilities sector is holding above its 200-day moving average, with support at $65 and resistance at $68. Energy is consolidating just below recent highs, with a breakout above $80 in play. Banks are forming a base above their post-crisis lows, with $40 as key support. RSI readings are neutral to slightly bullish, suggesting there’s room to run if the rotation accelerates. Watch for a decisive move above resistance in energy and utilities as confirmation that the bid is real. If banks can hold above $40, the recovery story gains traction.

The risks are clear. If the Fed surprises dovish, or if tech stages a violent short-covering rally, the rotation could stall. A sharp drop in oil prices would also hit energy stocks. And if the macro data deteriorates further, think another leg down in job openings or a surprise contraction in PMI, defensive sectors could get dragged down with everything else. But for now, the risk/reward favors sticking with what’s working.

The opportunity is in selective exposure. Go long utilities and energy on dips, with stops just below recent support. Banks offer an asymmetric bet if the yield curve steepens, but keep stops tight. Industrials are a slower burn, but could outperform if infrastructure spending ramps up. For those who can’t stomach the volatility in tech or crypto, this is the rotation that pays you to wait.

Strykr Take

Ignore the AI noise and the crypto drama. The real money is moving into sectors that actually make money. Utilities, energy, and banks aren’t sexy, but they’re quietly outperforming while the rest of the market panics. This is a rotation, not a retreat. Position accordingly.