Despite all the headline worries so far this year, the market has put together a strong first half.
The S&P 500 is higher by 9.7%, the Dow is up by 9.1%, the Nasdaq has risen by 12.4%, and the Russell 2000 small-cap index has gained 20.1%.
The bull market remains in full effect.
And our expert analysts expect it to continue, driven higher by the ongoing momentum of the AI trade and a continuation of the impressive earnings growth that we saw in the first quarter of the year.
Today, let’s check in with a few of our analysts and see what they’ve been writing to their subscribers as the first half of 2026 comes to a close.
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3 Market Perspectives for the Rest of 2026
Chris Preston – Cabot Stock of the Week – From July 6, 2026
Since we last wrote... the market has mostly run in place, with the S&P 500 trading within 10 points of where it closed on the day of our last issue. The Dow has been slightly more productive, edging up nearly 2.5% to reach new all-time highs just shy of 53,000.
There hasn’t been much on the news front, which is a welcome change these days, though it’s also not entirely uncommon in the middle of summer. Besides, that’s about to change: Second-quarter earnings season gets underway next week. If it’s anything like recent earnings seasons, it could send share prices to new highs. Indeed, big things are expected: Analysts anticipate a second straight quarter of EPS growth north of 20%, and a seventh straight quarter of double-digit earnings growth. That AI-spurred earnings boom has fueled the ongoing bull market, which is now at the three-and-a-half-year mark. I don’t expect it to fizzle anytime soon.
Mike Cintolo – Cabot Momentum Trader – From July 2, 2026
The volatility and crosscurrents seen near the end of June have continued, with an initial sharp rebound in the AI group (and sluggishness from the broad market) on Monday and Tuesday followed by another sharp decline as fears of competition and pricing woes brought in the sellers. Overall, the big-cap indexes are up nicely this week, though the broader measures are up a smidge and growth funds were mixed.
Once again, most of the intermediate-term evidence is still bullish, so we’re leaning that way, too. But our biggest thought right now remains the crosscurrents that exist: On a nearly daily basis, money is sloshing back and forth between areas, and among the AI leaders anyway, the volatility after big runs in April and May has been extreme and, in some cases, out of control; lots of up-down-up-down action after a big rally can often signify distribution (the sellers are really putting up a fight).
Indeed, in the past few years, when we’ve seen a few weeks of rotational action, it has sometimes led to some sort of broader market pullback, which does make us wary in the near term.
That said, the fact is most of those volatile AI leaders are still in uptrends (more are bending, but few have cracked open), and the other side of the coin is more encouraging: Going along with the broad market rally isn’t just old school industrials and defensive stocks (which have sagged this week, which is a small plus), but we continue to see more retail, medical and other growth-y ideas in our weekly screens.
All told, we’re sticking with our current stance, [moderately bullish], and will be watching the post-holiday action closely. If the AI selling continues, it could get dicey for the overall market, but so far, the vast majority of the action has been tedious but normal in that space, and the fresher leadership that’s emerged is a plus. We continue to lean bullish but are keeping our eyes open, too.
Tom Hutchinson – Cabot Dividend Investor – From July 1, 2026
June was a reversal of the market situation in April and May as technology floundered and other sectors reignited.
During the war, technology alone lifted the market indexes to new highs. Most stocks struggled amidst high oil prices, rising inflation, and rising interest rates. But oil prices are coming down fast, now under $70 per barrel from $108 in the middle of May. Oil prices are almost back to where they were before the war.
The factors holding most stocks back reversed in June. At the same time, the AI trade has taken it on the chin this month after soaring in the months prior. The top-performing S&P 500 sectors over the past month were health care (7%), industrials (5.3%), financials (5%), and utilities (3.5%). Meanwhile, information technology was down 4% in June.
Will the same trends continue in July and beyond? It’s hard to say. While oil prices have plummeted as traffic through the Strait of Hormuz is better than expected, there could be some upward pressure on prices going forward. The current peace may not hold. Oil inventories across the globe are severely depleted after the war, as restrictions are coming off oil use.
Technology was down in June, but it can still come roaring back. Investors are fickle and move from being worried about the massive investments in AI to being excited about the future potential. They could flip back to excited mode, especially if the rally in the rest of the market wanes.
Meanwhile, another earnings quarter begins this month. Last quarter was spectacular, with average S&P company earnings growth around 29%. Another strong quarter could trump everything else and lift the market higher.
As you can see, Cabot’s consensus view is overall bullish, if a bit guarded. And while Mike Cintolo has highlighted some potential for near-term weakness due to volatility in market leadership, both Tom Hutchinson and Chris Preston expect strong earnings growth to carry the day for the bulls.
To read more from all of our analysts, consider a subscription to Cabot Prime Plus or Cabot Prime Pro, which will give you access to the three analysts quoted above, as well as Cabot Money Club’s Nancy Zambell, Cabot Turnaround Letter’s Clif Droke, Cabot Explorer’s Carl Delfeld, small-cap and early-opportunities expert Tyler Laundon, Cabot Insider Edge’s Michael Brush, and (for Prime Pro subscribers) options guru Jacob Mintz.
We’ve got a special Fourth of July offer available right now.
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