Weekly Buzz: Why the “old” economy should be on your radar

If you've been following markets this year, you'd think the only story worth telling is about AI. But while the spotlight tends to stay fixed on tech, the "old" sectors building the physical backbone behind all that tech have been quietly outperforming.

What’s going on here?

AI runs on physical infrastructure, and building it out at scale requires vast amounts of power and raw materials. The problem is, much of the world's electrical grid, like that of the US, was built between the 1950s and 1980s. Now, growth from AI, EVs, and renewables is hitting that aging system all at once, and upgrading it is expected to cost $5.8 trillion through 2035. US electricity demand grew nearly 3% in 2025 after nearly two decades of flat growth, and it's projected to rise 38% by 2040.

All of this is showing up in the numbers. Nine of the S&P 500's 11 sectors are in positive territory this year, led by the less glamorous corners of the market: energy, industrials, utilities, and materials. These sectors tend to be home to what investors call "value" stocks: mature, asset-heavy businesses that trade at lower multiples than their peers.

Right now, those cheaper valuations also come paired with a structural tailwind from the tech and energy buildout. The materials sector is forecast to post double-digit earnings growth this year, with utilities not far behind.

What’s the takeaway?

This isn't about picking sides between "old" and "new" economy companies; they’re all interconnected. For long-term investors, the combination of structural demand and cheaper valuations outside of tech is worth a look. The most futuristic technology in the world is being built on some very old-school businesses.

(If you want to invest in specific sectors like industrials or energy, see Flexible Portfolios.)

In Other News: What the UAE's OPEC exit means for oil prices

After nearly 60 years of membership, the United Arab Emirates (UAE) has walked away from OPEC. The exit ends decades of coordinated oil production with the cartel.

OPEC works by setting production quotas: caps on how much each of its members pumps and sells. The idea is to keep global supply tight enough to support prices. The UAE's quota sat at around 3.2 million barrels per day, well below its actual production capacity of about 4.8 million. Tensions with Saudi Arabia over this issue had been building for years.

The timing here is relevant. The Strait of Hormuz, through which a fifth of the world's oil flows, has largely been blocked since the US-Israel conflict with Iran began. Brent crude prices are now hovering at roughly US$110 per barrel, up more than 50% since the conflict began. A ceasefire took effect early April, but it has been fragile. Just this week, US and Iranian forces traded fire after Washington launched 'Project Freedom,' an effort to escort commercial ships through the waterway.

A major oil producer with significant spare capacity now sits outside the cartel, weakening OPEC's grip on global supply. The UAE's exit isn’t likely to flood the market with new supply overnight, but once the Strait reopens, the UAE will be free to pump at full capacity. If other members follow, or if quota discipline slips, oil prices face more downward pressure. For oil-importing economies across Asia and Europe, which have borne the brunt of elevated energy costs, lower prices would be welcome news.

These articles were written in collaboration with Finimize.