Energy fund falls 2.8% as oil reverses; Fed delivers first hike since 2023
The energy fund XLE fell 2.8% on Wednesday, September 16, 2026, reversing a 2.2% gain, as WTI crude dropped 3.5% and the Fed raised rates a quarter point to 3.75% to 4.00%.
The Federal Open Market Committee voted 12-0 on Wednesday to raise its target range a quarter point to 3.75% to 4.00%, the first increase since 2023. The committee's new projections for the federal funds rate put the 2026 and 2027 medians at 4.1%, against June's 3.8% and 3.6%. Chairman Kevin Warsh said inflation "is too high and has been for too long." The 10-year Treasury yield was 5.01%.
Nine of eleven sector funds fell.
Energy led as nine of eleven sectors fell
- +0.1%
- +0.07%
- −0.02%
- −0.1%
- −0.4%
- −0.6%
- −0.6%
- −0.7%
- −0.9%
- −1.6%
- −2.8%
The financials fund XLF dropped 1.6% on 1.7 times average volume.
Heavy volume concentrated in energy and financials
The S&P 500 fund SPY lost 0.45%. The equal-weight S&P 500 fund RSP lost 0.79%.
Four producers, one oil reversal
West Texas Intermediate crude was at $102.12 a barrel as of 4:28 p.m. Eastern, down 3.5%. Brent was at $105.52, down 3.0%. Saudi Arabia was offering extra cargoes via Oman. U.S. crude inventories fell 640,000 barrels in the week ended September 11, short of the 1.6 million-barrel draw that had been expected, after the American Petroleum Institute had reported a 7.1 million-barrel build. Energy Secretary Chris Wright said about 18 million barrels flowed out of the Persian Gulf on Tuesday, near pre-conflict levels.
Exxon Mobil, Chevron, ConocoPhillips and EOG Resources are 46% of XLE. They subtracted 1.8 percentage points from it at Wednesday's close. Exxon Mobil fell 3.5%, Chevron 2.9%, ConocoPhillips 6.1% and EOG Resources 5.7%. Valero and Marathon Petroleum, the refiners, rose 1.6% and 0.7%. The drop in XLE was an upstream event, and it drew 1.8 times the fund's usual volume. The fund closed at $64.07, below Monday's $64.53, more than erasing Tuesday's 2.2% gain.
XLE is still up 45% this year, against 11% for SPY.
J.B. Hunt Transport Services dropped 13% after saying third-quarter earnings would decline 5% to 10% from the second quarter. Diesel prices were up 10% from July to August and had risen in eight of the quarter's 11 weeks; driver costs were running $25 million above the second quarter. Management called the pressure "more cyclical than structural." It is 0.4% of the industrial fund XLI.
Banks sold as a group
Goldman Sachs dropped 4.0%, Bank of America 2.7%, Wells Fargo 3.0% and JPMorgan Chase 1.0%. Those four names accounted for 0.50 percentage points of the decline in XLF. The other seventy-odd holdings supplied the rest. Berkshire Hathaway, 12% of the fund, rose 0.8% and did not offset them.
The real estate fund VNQ lost 0.65%. In communication services, AT&T, Verizon, Charter and Comcast subtracted 0.58 percentage points from XLC, which fell 0.86%. Meta Platforms, 19% of that fund, rose.
Technology refused to fall
Nvidia, 18% of VGT, rose 0.8%. Intel rose 4.0% after a report of talks with SK Hynix on U.S. memory-chip production. Microsoft, 12%, fell 1.4% and canceled Nvidia's contribution. The Nasdaq-100 fund QQQ was up 0.03%. The technology fund did not so much rally as refuse to fall.
Tuesday's crude spike is off the board. The higher policy rate is not.
Frequently asked
Why did the energy fund drop so much?
WTI crude fell 3.5% and the four biggest producers in the fund, Exxon Mobil, Chevron, ConocoPhillips and EOG Resources, subtracted 1.8 percentage points between them.
Was the whole energy sector selling off?
No, the decline was an upstream event: the refiners Valero and Marathon Petroleum both rose.
Why did oil reverse after Tuesday's gain?
Saudi Arabia was offering extra cargoes via Oman, U.S. crude inventories fell far less than expected, and Persian Gulf flows were back near pre-conflict levels.
Did technology actually rally?
Not really: Nvidia and Intel rose but Microsoft's decline cancelled Nvidia's contribution, leaving the fund barely positive.