Utilities sector outperforms in October as Exelon leads the gainers and NRG lags

What happened

In October, the utilities sector gained 10.12% while the S&P 500 fell 0.94%. Exelon led with a 14.07% rise after strong quarterly results, while merchant power company NRG Energy was the worst performer in the sector.

Confirmed

Global impact / market context

Falling long-term Treasury yields supported utilities because their stable cash flows and dividends make them bond proxies, which means they behave somewhat like bonds. This helped regulated electric and water utilities more than merchant power or AI-linked names, shaping investor positioning.

Analyst inference

Government bonds rallied as investors moved toward safer assets during a selloff in AI and technology stocks, with the 10-year Treasury yield falling 29 basis points to around 5%. Lower yields generally benefit utilities, which are often viewed as bond proxies, meaning their stable cash flows and dividends make them behave somewhat like bonds.

Analyst inference

What to watch

1. Exelon narrowed its full-year 2026 adjusted EPS guidance to $2.85-$2.91 and said EPS growth through 2029 should be near the upper end of its 5%-7% target range. Confirmed
2. Watch whether regulated electric and water utilities keep outperforming merchant power and AI-linked names, as the article reports a clear divide between these groups in October. Proposed
3. Track long-term Treasury yields, because lower yields can support utilities' bond-like cash flows and dividends, while a reversal in yields could pressure the sector's relative performance. Analyst inference

Evidence

• seekingalpha.com