Key Highlights

● The utilities ETF XLU rose 0.70% premarket while Nasdaq-100 futures fell about 2.6%.

● The 10-year Yield traded near 4.94% to 4.99% after topping 5.30% earlier.

● Exelon beat consensus and narrowed 2026 guidance to $2.85 to $2.91.

● Dominion expects 2026 results in the top half of its guidance range.

With technology stocks reeling, investors are once again reaching for the steadier parts of the market. The Utilities Select Sector SPDR ETF, XLU, was up 0.70% premarket on Friday, according to one market brief, even as Nasdaq-100 futures fell about 2.6% and S&P 500 futures about 1.1% around 8 a.m. ET, according to market quotes.

A defensive bid and the rate tailwind

Utilities are among the sectors set for solid gains in October, according to media reports, alongside energy, financials and health care. That is a sharp contrast with the Nasdaq Composite, which was down about 2.5% for the month through Thursday's close, based on closing levels.

Falling long-term yields are a big part of the story. Utilities are often treated as bond proxies because of their steady dividends, so they tend to benefit when Treasury yields decline. The 10-year yield traded near 4.94% to 4.99% this morning, after topping 5.30% earlier in October, the highest level since 2002, according to market data.

One market commentary said yields were lower across the curve and "down almost 40bp in October," with havens in demand. Gold, by contrast, was down about 1.4% on the day and roughly 5% for the month, according to market data, suggesting investors are favoring income-producing defensives over precious metals. Volatility is also creeping higher: the VIX was indicated near 18.6 premarket, up from 17.20 at Thursday's close, according to market quotes, a level that often coincides with Demand for lower-beta sectors.

Earnings and growth support the move

Two Dow Jones Utility Average members reported before the bell. Exelon (NASDAQ:EXC) posted adjusted operating Earnings of $0.87 a share, above the $0.81 pre-week consensus listed in an earnings calendar, and narrowed its 2026 guidance to $2.85 to $2.91. Shares were up 3.22% at $47.39 as of 8:23 a.m. ET, according to a premarket table.

Dominion Energy (NYSE:D) reported operating earnings of $1.28 a share, up from $1.06 a year earlier, and said it expects 2026 results in the top half of its $3.45 to $3.69 range. FirstEnergy (NYSE:FE), another member, was indicated up about 1%, according to market commentary, though no specific catalyst was cited.

The defensive rotation extends beyond utilities. A premarket table showed consumer staples such as Colgate-Palmolive (NYSE:CL), PepsiCo (NASDAQ:PEP) and General Mills (NYSE:GIS) higher, with its auto-generated context describing a defensive rotation as oil hit six-month highs and tech sold off.

Utilities are no longer only a hiding place. Data-center demand has turned parts of the sector into an AI infrastructure play. American Electric Power (NASDAQ:AEP) raised its Capital plan by 30% to $100 billion on Thursday, and Alliant Energy (NASDAQ:LNT) cited 3.4 gigawatts of contracted data-center demand, according to one market brief.

Counterarguments and what to watch

The rate picture is not straightforward. The Federal Reserve hiked in September, held this week, and markets price about 85% odds of another hike in December, according to market pricing and media reports. If Inflation stays hot, long yields could climb again, undermining the bond-proxy appeal.

Heavy capital spending also requires financing, potentially through new equity, and regulators must approve rate increases to recover those costs. If AI spending is cut back, the growth premium that some utilities now carry could fade.

Watch whether utilities hold their premarket gains once the 9:30 a.m. ET bell rings, and how the 10-year yield reacts to the Employment Cost index and Chicago PMI. St. Louis Fed President Alberto Musalem speaks at 12:30 p.m. ET. Next week brings the midterms on Nov. 3, Treasury's quarterly Refunding on Nov. 4 and the October jobs report on Nov. 6.