Energy Stocks Steady Amid Macro Chaos, with a Sunday Night Earnings Surprise Ahead

by Christine Short of Wall Street Horizon, 1/22/26

Key Takeaways

  • Bond market stress, global geopolitical risk, and weather shocks at home have lifted Energy to the top sector spot YTD

  • Baker Hughes’ Q4 report this weekend follows a slew of oil services company earnings

  • Exxon Mobil and Chevron commentaries may be just as impactful as their Q4 numbers following the Maduro capture

It was a sea of red to kick off the holiday-shortened trading week yesterday. President Trump’s ambition to annex part or all of Greenland drew backlash from European leaders. A new set of tariffs also riled markets, precisely one year after the 47th POTUS took office. In terms of market action, the Cboe Volatility Index (VIX) spiked above 20, while the U.S. Dollar Index (DXY) suffered its worst session since last August. But it wasn’t solely a U.S.-Europe macro story.

The Land of the Rising Sun....And Falling Fixed Income Market

An outright bond market implosion occurred in Japan. The island nation’s 40-year yield skyrocketed to a record above 4.20%, and its benchmark 30-year rate jumped 27 basis points to a fresh all-time high of 3.88%. Worries over tax cuts and their impact on Japan’s fiscal situation continued a macro trend ongoing for the past year-plus.

All eyes will be on the upcoming Bank of Japan monetary policy meeting, ahead of the U.S. Federal Reserve’s January 28 interest-rate decision.

Energy Atop the Early-Year Sector Leaderboard, High Macro Volatility

For investors, 10 of the 11 S&P 500 sectors traded in the red yesterday morning. The lone bright spot? Energy.

The oil & gas space often offers diversification benefits to global portfolio managers when macro jitters take center stage. Shares of Exxon Mobil (XOM), the world’s most valuable publicly traded energy company, tagged a record high above $131 for the first time. It has been remarkable how resilient large energy firms have been, given depressed oil prices.

Indeed, both WTI and Brent crude have felt the brunt of a global oil glut. President Trump’s “drill, baby, drill” mindset and OPEC's unsuccessful attempts to stabilize the supply-demand balance have kept oil bears in charge. Though prices spiked earlier this month when the U.S. captured Venezuelan President Nicolás Maduro (it feels like ages ago at this point), prices quickly fell back down. American households probably aren’t complaining, as AAA reports that the average cost of a gallon of regular unleaded is near five-year lows at $2.82.

Don’t Forget about Natural Gas: Old Man Winter Tightens His Grip

Stable oil prices contrast what’s happening in the natural gas markets. The February 2026 contract of U.S. Henry Hub gas jumped nearly 30% on Tuesday. Forecasts for bone-chilling cold over the final week of January spooked markets, and this weekend’s wintry blast could rival what transpired in Texas four years ago, just as power grids grapple with rising prices and pressure from policymakers. Impacts are likely from the Lone Star State to the Mid-Atlantic.