Yardeni Says Buy Energy Stocks — Just As Trump's Iran Ceasefire Runs Out Of Time
The Energy Select Sector SPDR Fund (NYSE:XLE) is up 25% year-to-date, and remains the best-performing sector in the S&P 500. But it is also the only sector deep in the red since President Donald Trump floated an end to the war in Iran — and one of Wall Street’s most-followed strategists is telling clients to buy the selloff.
Ed Yardeni flipped back to overweight Energy this week after giving up on the sector two years ago, suggesting that the recent pullback in oil stocks is a gift to investors willing to bet that oil prices will not return to pre-war levels.
“We are inclined to use the recent selloff to overweight the sector,” Yardeni wrote in a Monday’s note.
The Yardeni Research call is that the market is pricing a clean, fast end to the Iran war — and that this is the wrong read.
Yardeni Says The Pre-War Oil Price Range Is Gone
The Yardeni thesis on oil prices is that Brent crude now trades in a $75-to-$95 range post-war, and that the pre-war range of $55-to-$75 is finished.
Two forces, in his view, make that permanent. The first is physical damage to energy infrastructure across the Arabian Gulf.
The second is a structural repricing of maritime insurance and transit confidence through the Strait of Hormuz.
Even a full reopening of the Strait of Hormuz, Yardeni indicates, would not immediately restore normal oil flows. As he puts it: “The supply shock is likely to have a long tail.”
Bank of America’s commodity team, led by Francisco Blanch, lands in roughly the same neighborhood on oil prices.
In the Global Energy Weekly published Monday, the bank projects Brent oil averaging $93 per barrel in 2026, with a peak of $103 in the second quarter before drifting back toward $78 in 2027.
Non-OPEC supply growth of 400,000 barrels per day gets overwhelmed by roughly 4 million barrels per day of OPEC disruptions tied to the Iran war.
The oil market, on BofA’s math, falls into a 4-million-barrel-per-day deficit in the second quarter before grinding back toward balance next year.
Goldman Sachs tracks closer to $ 80–$90 Brent in similar war scenarios, which puts Yardeni’s $ 75–$95 call squarely within the Wall Street consensus band on oil prices.
The Best S&P 500 Sector Of 2026 Is Now The Worst Since The Iran Ceasefire
The Energy Select Sector SPDR Fund was the runaway leader of the S&P 500 heading into late March.
By Friday, March 27, the Energy ETF was up 40.84% year-to-date, leaving every other sector in the dust as the war in Iran pushed crude oil above $100 per barrel.
Then Trump announced the two-week ceasefire on April 7, and the trade reversed hard.
While XLE still leads the S&P 500 sector table for the year at 25.22%, its margin of leadership has been halved over the past three weeks.
According to Country ETF Tracker data, XLE has fallen 10.24% since Trump floated the end of the war — the worst performance among all 11 S&P 500 sectors over that window. Every other sector is green or close to flat.
| Fund | YTD Return As of April 21, 2026 | Return Since Mar 30 |
|---|---|---|
| Energy Select Sector SPDR Fund | +25.22% | −10.24% |
| Materials Select Sector SPDR Fund (NYSE:XLB) | +14.90% | +5.67% |
| Industrial Select Sector SPDR Fund (NYSE:XLI) | +10.95% | +9.57% |
| Real Estate Select Sector SPDR Fund (NYSE:XLRE) | +9.47% | +9.10% |
| Technology Select Sector SPDR Fund (NYSE:XLK) | +7.81% | +21.58% |
| Utilities Select Sector SPDR Fund (NYSE:XLU) | +6.42% | −1.76% |
| Consumer Staples Select Sector SPDR Fund (NYSE:XLP) | +6.30% | +0.28% |
| Communication Services Select Sector SPDR Fund (NYSE:XLC) | +0.48% | +9.21% |
| Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) | +0.32% | +13.15% |
| Financial Select Sector SPDR Fund (NYSE:XLF) | −3.79% | +8.39% |
| Health Care Select Sector SPDR Fund (NYSE:XLV) | −5.20% | +1.62% |
Energy Stocks Are Now Cheaper Than The S&P 500
This is the valuation angle that makes the Yardeni Energy stocks call interesting beyond the oil price view.
XLE now trades at roughly 16 times forward earnings. That compares with 23.9 times for the S&P 500 via SPY and 30 times for the Technology sector.
What that means in practice: even if Brent oil drifts toward the lower end of the $75-to-$95 range, Energy stocks are discounting a much worse outcome than the oil supermajors’ cash flow profiles suggest.
The bear case for Energy stocks is straightforward. A confirmation of a US-Iran deal resets Brent oil below $80, the insurance premium unwinds faster than expected, and XLE gives back a chunk of its YTD gain.
The bull case is that the ceasefire breaks, Hormuz stays blocked through the summer, and Energy stocks like Exxon Mobil Corp. (NYSE:XOM), Chevron Corp. (NYSE:CVX) and ConocoPhillips (NYSE:COP) may retake their March highs on a different set of oil price headlines.
What Yardeni is effectively arguing is that both paths still leave Brent oil higher than the pre-war range — and Energy stocks at 16 times earnings are pricing neither of them.
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