Energy Stocks Rally on Geopolitical Tensions, Devon Surges

Energy stocks climbed in late afternoon trading, with the NYSE Energy Sector Index rising 1.9% as geopolitical tensions escalated. U.S. self-defense strikes on Iran prompted supply risk concerns, lifting oil and gas equities even as broader markets declined sharply. The S&P 500 fell 1.62% on the session as investors weighed Middle East supply disruption risks against demand headwinds.

Devon Energy ($DVN) shares surged 5.74% to close at $46.60 after the company announced plans to return 70% of free cash flow to shareholders following a merger. Evercore ISI Group upgraded $DVN, with investors applauding the post-merger financial guidance. Chevron ($CVX) closed at $189.80, up 1.6% on the day, extending its year-to-date return to 21.7% and one-year total shareholder return to 36.6%. $CVX has gained 2.7% over the past month despite a 3.6% decline over three months. ExxonMobil ($XOM) and $CVX reported a combined $7.6 billion profit from operations in Guyana last year, with the giant, low-cost, high-margin oil discovery providing a strategic hedge amid Middle East geopolitical risks. ConocoPhillips ($COP) signed a 30-year natural gas supply agreement with Glenfarne's Alaska LNG project, securing production from Alaska's North Slope.

SLB ($SLB) and Qualcomm Technologies signed a memorandum of understanding to co-develop edge artificial intelligence solutions for the energy sector. The collaboration will combine Qualcomm's edge computing chips with $SLB's Agora edge AI platform to enable real-time, automated decision-making in oilfield and energy infrastructure operations, with a focus on operational efficiency, cybersecurity, and resilience. Multiple oilfield services stocks including companies with exposure to Halliburton ($HAL) traded higher following the U.S. strikes on Iran.

NextEra Energy ($NEE) traded at $85.12, up 0.6% over the past week but down 10.2% over the last month, while posting year-to-date gains of 5.2% and one-year returns of 20.0%. Analysts noted $NEE's position as a large U.S. utilities stock with exposure to AI-driven utility demand growth. Duke Energy ($DUK) received up to $61.8 million in new U.S. Department of Energy grant funding to refurbish coal-fired plants in Kentucky and North Carolina, adding to an earlier $34 million grant for North Carolina's Belews Creek Station and bringing total potential support to nearly $96 million. The grants offset refurbishment costs while helping $DUK maintain grid reliability. Southern Company ($SO) was featured in research reports highlighting expansion plans and growth drivers.

First Solar ($FSLR) faces scrutiny over its heavy reliance on Section 45X tax credits, which comprised between 76% and 86% of the company's gross margin. Analysts rated $FSLR as a Sell, noting that profitability remains heavily dependent on subsidy continuation. The stock declined alongside the broader tech sector pullback, though the average S&P 1500 Tech stock remained up over 100% year-over-year even after recent weakness.

U.S. self-defense strikes on Iran escalated Middle East tensions, with the Trump administration warning the country would have to pay the price for stalling negotiations. The military action triggered gains across oilfield services and exploration stocks as investors priced in heightened supply disruption risks. Energy equities provided a hedge against broader market declines, with the Dow Jones Industrial Average falling 1.87% and the Nasdaq 100 Index dropping 1.98% on the session.