Energy stocks diverged from a rising market as crude oil prices collapsed. West Texas Intermediate (WTI) crude fell approximately 7.8%. Prices settled near $91.28 per barrel.
Traders sold off positions following reports of a potential second round of peace talks between the United States and Iran. This de-escalation unwound the geopolitical risk premium that previously supported prices during Middle East tensions.
The energy sector fell over 2% while the S&P 500 surged. This volatility directly affected the earnings outlook for companies within the VDE ETF.