The Energy Select Sector SPDR Fund (XLE  ) is trading lower by 6.91% to $76.67 during Thursday's session, as investors stepped back from Wednesday's risk-on rally and locked in profits, even as new inflation data came in cooler than expected.

What To Know: After surging around 10% following President Donald Trump's surprise 90-day pause on additional tariffs for non-retaliating countries, XLE fell around 5.9% Thursday morning, mirroring a broader market cooldown.

XLE is a sector-focused exchange-traded fund that tracks the performance of U.S. energy companies within the S&P 500. Its top holdings include Exxon Mobil Corp (XOM  ), Chevron Corp (CVX  ), Schlumberger NV (SLB  ), ConocoPhillips (COP  ) and Occidental Petroleum Corp (OXY  ) -firms highly sensitive to commodity pricing, global demand expectations and geopolitical developments.

What Else: Despite the pullback, Thursday's macroeconomic backdrop was supportive. U.S. consumer prices unexpectedly declined in March, with headline inflation falling to 2.4% year-over-year and core inflation easing to 2.8%, both below forecasts.

The CPI even contracted 0.1% month-over-month, the lowest reading since May 2020, suggesting that tariff-related price pressures may be easing rather than accelerating.

However, energy markets faced mixed signals. A sharp 6.3% drop in gasoline prices weighed on the sector outlook, despite increased investor confidence in global trade stability following the tariff reprieve.

XLE's pullback Thursday also likely reflects a combination of profit taking and caution in a sector still tethered to volatile global dynamics, including Chinese demand, OPEC policy and currency fluctuations.

According to data from Benzinga Pro, XLE has a 52-week high of $98.97 and a 52-week low of $74.49.