Energy vs Technology
XLE (Energy Select Sector SPDR) tracks energy sector with top weights ExxonMobil ~22 percent, Chevron ~15 percent. XLK (Technology Select Sector SPDR) tracks tech with top weights AAPL, MSFT, NVDA, AVGO, ORCL combined ~65 percent.
Also known as: Energy (XLE) (ETF_XLE, energy sector) · Technology (XLK) (ETF_XLK, tech sector)
Why This Comparison Matters
XLE (Energy Select Sector SPDR) tracks energy sector with top weights ExxonMobil ~22 percent, Chevron ~15 percent. XLK (Technology Select Sector SPDR) tracks tech with top weights AAPL, MSFT, NVDA, AVGO, ORCL combined ~65 percent. April 2026: WTI $95.85 (Iran war oil shock); XLK $155.03 (AI capex). The XLE/XLK ratio captures the ultimate old-vs-new economy rotation. Energy outperforms during inflation regimes, commodity supercycles, supply shocks. Tech outperforms during disinflation, growth scarcity, AI capex booms. April 2026 setup unusual: both rallying together as Iran war boosts energy + AI capex narrative continues. Pair captures dispersion within new equity dominance regime.
The April 2026 Configuration
XLE near 52-week highs (estimated +20-25% YTD on Iran war). WTI $95.85 (April 2026, +30% from January 2026). XLK $155.03 (April 21 2026, near recent highs).
XLE/XLK ratio approximately 0.55 (estimated). 12-month range 0.50-0.65. Long-term range varies: 2008 commodity peak XLE/XLK >2.0; 2020-2021 zero-rate AI bull XLE/XLK <0.30; 2022 Russia + tech bear XLE/XLK >0.85; 2024 AI bull XLE/XLK <0.45; 2026 Iran war XLE/XLK ~0.55.
The combined April 2026 reading: rare configuration where both XLE and XLK are rallying. XLE on Iran oil shock; XLK on AI capex narrative continuation. Configuration suggests inflation regime + AI capex coexisting. Watch for: which dominates if Iran ceasefire compresses oil; which catalyst exhausts.
How XLE and XLK Embody Old-vs-New Economy
XLE and XLK represent fundamentally different economic exposures.
XLE composition: integrated oil majors (XOM, CVX) ~37%; E&P (COP, EOG, OXY, PXD) ~25%; oil service (SLB, HAL, BKR) ~10%; refiners (MPC, VLO, PSX) ~12%; midstream (KMI, OKE, WMB) ~8%; integrated gas + renewables ~8%. Cyclical, capital-intensive, dividend-paying mature industries.
XLK composition: AAPL ~17%, MSFT ~14%, NVDA ~10%, AVGO ~6%, ORCL ~4%, plus other tech. Combined top 5 ~50%. Growth-oriented, capital-light (relative), R&D-driven, low-dividend (XLK ~0.7% vs XLE ~2.5%).
The practical implication: XLE/XLK rotation reflects macro regime. Inflation regime = XLE outperforms (commodity hedge + cyclical earnings). Disinflation/AI regime = XLK outperforms (multiple expansion + growth scarcity + AI capex). The 2024-2026 era saw both rally simultaneously due to dual narratives.
How XLE and XLK Diverge
Inflation regime: XLE outperforms XLK substantially. 2021-2022: XLE +50%; XLK -28%. XLE/XLK ratio +90% peak-to-peak.
Disinflation regime: XLK outperforms XLE. 2009-2014: XLE -20%; XLK +200%. XLE/XLK ratio -73% peak-to-peak.
AI capex regime: XLK outperforms XLE through earnings revisions despite higher rates. 2023-2024: XLK +75%; XLE +5%. XLE/XLK ratio -40%.
Commodity supercycle + AI: rare. April 2026 setup with both rallying. Iran war + AI capex coexisting.
Conditional Forward Response (Tail Events)
How Technology (XLK) has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in Energy (XLE). Computed from 1,281 aligned daily observations ending .
Following these triggers, Technology (XLK) falls 0.08% on average over the next 5 sessions, versus an unconditional baseline of +0.38%. 129 qualifying events; Technology (XLK) closed positive in 52% of them.
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Frequently Asked Questions
What are XLE and XLK?+
XLE (Energy Select Sector SPDR) tracks energy sector with top weights ExxonMobil ~22%, Chevron ~15%, ConocoPhillips ~7%. XLK (Technology Select Sector SPDR) tracks tech with top weights AAPL ~17%, MSFT ~14%, NVDA ~10%, AVGO ~6%, ORCL ~4% (top 5 ~50%). April 2026: WTI $95.85 (Iran war oil shock, +30% from January 2026). XLE near 52-week highs (estimated +20-25% YTD). XLK $155.03 (April 21 2026 near recent highs). XLE/XLK ratio ~0.55 (12-month range 0.50-0.65). Long-term range varies: 2008 commodity peak >2.0; 2020-2021 zero-rate AI bull <0.30; 2022 Russia + tech bear >0.85; 2024 AI bull <0.45; 2026 Iran war ~0.55.
How do XLE and XLK embody old-vs-new economy?+
XLE composition: integrated majors (XOM, CVX) ~37%; E&P (COP, EOG, OXY, PXD) ~25%; oil service ~10%; refiners ~12%; midstream ~8%; integrated gas + renewables ~8%. Cyclical, capital-intensive, dividend-paying mature industries. XLK composition: AAPL ~17%, MSFT ~14%, NVDA ~10%, AVGO ~6%, ORCL ~4%. Growth-oriented, capital-light (relative), R&D-driven, low-dividend (XLK ~0.7% vs XLE ~2.5%). XLE/XLK rotation reflects macro regime. Inflation regime = XLE outperforms (commodity hedge + cyclical earnings). Disinflation/AI regime = XLK outperforms (multiple expansion + growth scarcity + AI capex). 2024-2026 era saw both rally simultaneously due to dual narratives.
How do XLE and XLK diverge?+
Inflation regime: XLE outperforms substantially. 2021-2022: XLE +50%; XLK -28%. XLE/XLK ratio +90% peak-to-peak. Disinflation regime: XLK outperforms. 2009-2014: XLE -20%; XLK +200%. XLE/XLK ratio -73% peak-to-peak. AI capex regime: XLK outperforms through earnings revisions despite higher rates. 2023-2024: XLK +75%; XLE +5%. XLE/XLK -40%. Commodity supercycle + AI: rare. April 2026 setup with both rallying. Iran war + AI capex coexisting. Long-run correlation 0.30-0.50 (modest positive). Share market beta but diverge on macro regime.
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