An interesting tug of war is happening in one of the market's hottest sectors: utilities. On hand, you have the historic AI buildout fueling an unprecedented earning boom in an otherwise stogy sector. On the other hand, you have fastest rise in Treasury yields since 1994 dimming the sector's otherwise bright shine and sending the sector lower. Leaders at major tech firms continue to emphasize massive energy needs, but any signs of rising interest rates or tighter credit conditions have hit capital-intensive utility stocks first. Utilities' dividends are also attractive to income-focused investors, and rising rates presents competition for them as bond yields become more attractive relative to dividend paying stocks.
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