The summer of 2023 brought a historic heatwave to much of the United States, with temperatures reaching record highs across many regions of the country. This extreme heat led to a surge in demand for air conditioning and electricity to power AC units. As a result, stocks of companies manufacturing and supplying AC units and electricity saw major increases between June 1 and July 24, 2023.

The average high temperature across the contiguous U.S. in July 2023 was over 100°F - the hottest month ever recorded. Major cities like Phoenix, Las Vegas, and Los Angeles all saw temperatures of 115°F or higher. With scorching temperatures gripping the nation, demand for residential and commercial air conditioning skyrocketed. According to industry reports, AC unit sales were up over 50% compared to the previous summer.

This spike in AC demand led to huge stock price increases for companies like Carrier, Trane, and Lennox, which manufacture home and commercial AC systems. Carrier's $CARR  stock price rose 35% between June 1 and July 24, while Trane  $TT  and Lennox $LII saw increases of 28% and 31% respectively. With inventory struggling to keep up with demand, these companies were producing and shipping AC units as fast as they could.

The widespread use of AC also drove up electricity consumption, further boosting shares of utility and energy companies. Major providers like Duke Energy, Southern Company, and ConEdison all saw their stock value increase by over 20% through the summer as higher temperatures led to greater energy usage. This increase in electricity demand also boosted solar energy stocks, with Sunrun up 32% and SunPower up 29% in the same June-July period.

In the end, the extreme heatwave across the U.S. led to surging demand for air conditioning and electricity, which in turn fueled major stock growth for companies providing these critical cooling and energy services. This trend highlights the potential impacts of climate change on energy and utilities markets. As temperatures continue to rise, the demand for residential and commercial cooling can be expected to grow, likely further benefiting stocks in these sectors.