The oil trade that defined the first quarter of 2026 broke on Wednesday.
The energy sector — as tracked by State Street Energy Select Sector SPDR ETF (NYSE:XLE) — fell 4.7% on Wednesday morning, its worst single-session loss since April 10, 2025.
The SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP) dropped 6.3%, also its worst day in exactly a year.
President Donald Trump announced a conditional two-week ceasefire and Strait of Hormuz reopening late Tuesday, sending WTI crude futures down more than 18% on Wednesday — the sharpest single-session drop since April 2020.
Energy stocks, which had surged 40%–50% since Feb. 28 as the Strait closure drove oil above $112, reversed with the same velocity that built the rally.
The war premium that had built up over six weeks of Strait of Hormuz disruption unwound in hours, and the stocks that had been riding it had nowhere to hide.
XLE And XOP ETF Eye Worst Session Since Tariff Shock
Both XLE and XOP charts tell the same structural story.
Since U.S.-Israeli strikes on Iranian targets began on …
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