After a huge run in April and May, the sellers finally made a stand with the major indexes and leading growth stocks, but the rebound since then has been classic, with growth stocks rebounding nicely and with the quick, sharp decline hitting short-term sentiment. So is it all up from here? Not necessarily—there’s still a decent chance of more short-term shenanigans as the good news is out and many growth stocks remain extended to the upside. Still, the recent rebound is a good sign this bull phase has much farther to run. We’ll bump up our Market Monitor back to a level 8.

This week’s list covers a lot of different areas of the market, including a few names that took their time to get moving after the March low. Our Top Pick just decisively broke out of a huge launching pad on great volume after some wobbles after earnings.

For the last couple months, the market has seemingly been trading at post-war pricing. Now that the war is actually over (or close to it), let’s see if there are even higher rungs for stocks to climb. So far, the market likes the news, with the major indexes climbing between 1% and 3% today. Let’s hope the Fed and its new chief, Kevin Warsh, don’t throw cold water on the renewed rally later this week.

In the meantime, financials are finally getting going, and today we recommend a stock from that beleaguered sector that caught the eye of Michael Brush, chief analyst of our brand-new Cabot Insider Edge newsletter.

Details inside.

What a difference a week makes. After the prior Friday’s chip-driven rout, a volatile, headline-whipped week ultimately ended higher as growing optimism that a U.S.–Iran peace deal is finally within reach sent oil tumbling back toward $85 a barrel. And despite a modestly hot May inflation report and an Oracle-led wobble in AI names, by Friday the bulls had the upper hand as SpaceX pulled off the largest IPO in history.

What a difference a week makes. After the prior Friday’s chip-driven rout, a volatile, headline-whipped week ultimately ended higher as growing optimism that a U.S.–Iran peace deal is finally within reach sent oil tumbling back toward $85 a barrel. And despite a modestly hot May inflation report and an Oracle-led wobble in AI names, by Friday the bulls had the upper hand as SpaceX pulled off the largest IPO in history.

What a difference a week makes. After the prior Friday’s chip-driven rout, a volatile, headline-whipped week ultimately ended higher as growing optimism that a U.S.–Iran peace deal is finally within reach sent oil tumbling back toward $85 a barrel. And despite a modestly hot May inflation report and an Oracle-led wobble in AI names, by Friday the bulls had the upper hand as SpaceX pulled off the largest IPO in history.

Given some of the yellow flags that had built up, the market’s pullback hasn’t been a surprise--though we would say we’ve seen some quick tests in some growth areas and stocks, which does raise an eyebrow. We’ve trimmed our sails a bit and are OK staying somewhat close to shore for the moment, but overall, we do remain optimistic that the next big move is up. Tonight, we’re sitting tight with our current crop of stocks but are open to buying some strong, fresher leaders if the buyers pounce.

The “two-to-three-week” war in Iran continues, and it’s really beginning to show up in the diminishing pockets of consumers, as inflation just hit its highest rate in three years.

The Consumer Price Index (CPI) rose 0.5% in May after rising 0.6% in April. The inflation rate now stands at 4.2%, mostly as a result of higher energy prices. Core CPI—which the Federal Reserve has targeted for a 2% rate—is now 2.9%.

What started as another very bullish week for stocks turned into a bit of a mess on Friday as a confluence of negative items hit the market. First it was Broadcom (AVGO), Ciena (CIEN) and CrowdStrike (CRWD), all of which saw their stocks fall following earnings Wednesday afternoon, then a stronger-than-expected May jobs report sent Treasury yields surging, and finally leading AI play Anthropic put out a thought piece that recommended the speed of AI development should slow down a bit. The result was the Nasdaq’s worst single session since April 2025.

I am excited to introduce the inaugural issue of Cabot Insider Edge! This new investment product uses corporate insider buying activity to find the best stocks to consider and to support market analysis.

Cabot Insider Edge has its roots in our legacy product covering the emerging growth cannabis sector, called Cabot Cannabis Investor. So, while Cabot Insider Edge will contain stocks from any sector depending on insider activity, it will also continue to cover the highlights of cannabis investing, because the sector is at such an exciting and bullish inflection point.

Let’s jump in.

Despite the major indexes trading near the highs, most stocks have struggled.

For most of the rest of the market, the problem is oil. The price per barrel of West Texas Intermediate (WTI) crude oil skyrocketed to over $100 from under $60 before the war. And prices stayed elevated for more than three months. Oil is involved in everything. And that means inflation. And inflation means high interest rates.

But that’s in the past. The future is likely to be different.

The war is likely to end at some point before long, and the Strait of Hormuz will open again. Without war, oil prices will fall. Interest rates will come down. That rate hike may be off the table. And stocks held back by inflation and high interest rates should be poised to move higher.

The pessimists have it all wrong. The resilient economy isn’t precarious. The current restraints are precarious. When the falling oil prices unleash a stronger economy, it will change things. Let’s get ahead of the curve with stocks that will benefit.

What started as another very bullish week for stocks turned into a bit of a mess on Friday as a confluence of negative items hit the market. First it was Broadcom (AVGO), Ciena (CIEN) and CrowdStrike (CRWD), all of which saw their stocks fall following earnings Wednesday afternoon, then a stronger-than-expected May jobs report sent Treasury yields surging, and finally leading AI play Anthropic put out a thought piece that recommended the speed of AI development should slow down a bit. The result was the Nasdaq’s worst single session since April 2025.

What started as another very bullish week for stocks turned into a bit of a mess on Friday as a confluence of negative items hit the market. First it was Broadcom (AVGO), Ciena (CIEN) and CrowdStrike (CRWD), all of which saw their stocks fall following earnings Wednesday afternoon, then a stronger-than-expected May jobs report sent Treasury yields surging, and finally leading AI play Anthropic put out a thought piece that recommended the speed of AI development should slow down a bit. The result was the Nasdaq’s worst single session since April 2025.

A major economic narrative that took shape in recent years was the decline and (presumptive) inevitable death of the so-called “petrodollar,” as a growing number of countries diversified their foreign exchange reserves away from the U.S. dollar and toward gold and alternative currencies like the Chinese yuan.

WHAT TO DO NOW: The overall market remains in good shape, though we are seeing some exuberance on the upside and also a few leaders begin to act sloppy. Near term, then, it’s still a coin flip as to what comes, but the vast majority of intermediate-term evidence remains bullish. In the Model Portfolio, we took partial profits in Marvell (MRVL) earlier this week; tonight, we’re buying a half-sized position (5% of the account) in Bloom Energy (BE), which is extremely volatile but also strong and coming off a few weeks of rest. Our cash position will now be around 28%.

This market just keeps going higher.

Sure, there’s uncertainty out there. The war isn’t over. Inflation and interest rates are still too high. But stocks didn’t get the memo. After a strong April, the S&P 500 rose 5% and the Nasdaq soared 8% in May. The indexes are up 20% and 30%, respectively, since March 30 and are continuing to make new highs this week.

Despite the negative headlines and volatility, stocks just keep going.

After a strong April, the S&P 500 rose 5% and the Nasdaq soared 8% in May. The indexes are up 20% and 30%, respectively, since March 30. It’s also worth noting that despite the ongoing Iran war, the price per barrel of West Texas Intermediate crude oil closed down 17% for the month of May.

This week’s Memorial Day observance marked the traditional onset of the summer vacation season for millions of Americans. It’s a time of traveling, sightseeing, picnics and parties. It’s also the peak season for enjoying cold, carbonated beverages like soda pop and energy drinks.

With this dynamic in play, I think it’s time that we give some attention to our holding in PepsiCo (PEP), which is entering a critical period of its sales year.

On the heels of a miserable March and a euphoric April, I wrote several weeks ago in this space that I thought May would determine which direction the market is truly headed, at least in the intermediate term. We have our answer, and it’s a definitive “up.”

All three major U.S. indexes are touching record highs as of this writing, with the S&P 500 up 4.3% in May, the Nasdaq up 7%, and the slower-moving Dow Jones Industrial inching higher by 1.6%. That’s despite the ongoing Iran war and the accompanying sky-high oil and gas prices, escalating inflation, bond yields at multi-year highs, possible Fed rate hikes later this year, and record-low consumer sentiment.

Stocks have largely shrugged off this week’s dust‑ups in the Middle East as investors continue to bet on a near‑term memorandum of understanding (MOU) that would reopen the Strait of Hormuz and push bigger sticking points between the U.S. and Iran down the road.

Yields have cooled off this week and continue to do so this morning, thanks to a slightly lower‑than‑expected core PCE reading. April core PCE rose 0.2% month over month, below both March’s 0.3% reading and consensus, giving the Fed some breathing room as policymakers weigh the competing forces of inflation and growth.

The $145 trillion global bond market is under some stress due to runaway debt. The 30-year U.S. Treasury bond yielded over 5% last week, up from 4.63% at the end of February. Americans are struggling to keep up with their debt payments, as the cost of borrowing money increases. This is a global story. In Japan, the 30-year government bond yield just hit a record of 4.15%, and U.K. government debt jumped to 5.85% earlier this month.

Nothing stops this market. The S&P 500 hit another new high this week.

The spectacular earnings season helped power the rally. Average earnings growth on the S&P 500 is over 28% in the first quarter. That is far better than the expected 13.1% and the highest level of growth for any quarter since 2021.

We’ve all seen it before: the owner of a home in dire need of structural repair decides to “flip” the house for a quick profit by contracting a restoration service. Instead of making sorely needed foundational repairs, the cleanup crew focuses on superficial fixes like painting, tiling, flooring, etc., in hopes that a shiny new veneer will hide the problems that exist beneath the home’s exterior.

Crude though the analogy may be, I think it’s an apt description of what we sometimes encounter as turnaround investors.

WHAT TO DO NOW: The market and especially most leaders have finally shaken out a bit in recent days, and there are some worries we’re watching, including the rise in Treasury rates and the health of the broad market (our Two-Second Indicator is now negative). Even so, the primary evidence remains in good shape, and while this rest phase could easily take longer if the worries persist, the odds favor higher prices down the road. Tonight we’re making one small move: Averaging up on Axsome Therapeutics (AXSM), buying another 3% position. Our cash position will be around 34%, which we’ll be looking to put to work should the market continue to act properly.

The war in Iran has not sunk the stock market the way it appeared it might in March, nor has it put a dent in the U.S. economy (yet), with first-quarter earnings growth among U.S. large caps coming in at 27.7%, a five-year high. But the bond market has been profoundly impacted, with yields on the 10-year Treasury up 17% since late February to top 4.6% for the first time in a year. Even more troubling? Yields on the 30-year note are now north of 5% for the first time since 2007.

WHAT TO DO NOW: We’re still thinking many early-stage stocks (and the market) can see higher prices when looking months down the road—but there’s no doubt things have gotten a bit giddy with some names. Today we’re going to sell one-third of Marvell (MRVL) after the stock gapped up twice this week on no substantive news; we’ll book some of our great profit and hold the rest. Our cash position will be around 34% after the sale.

BBIO and WFRD to SELL. FROG to HOLD

Important News About Your Subscription

Today, a whopping eight Profit Booster positions will expire. Most are “slam-dunk,” full-profit trades, while others will go down to the wire.

The big takeaway, before we dive in, is we are going to let the situation play itself out, and come Monday/Tuesday of next week we will revisit our profits, as well as how we will manage the remaining positions.

I plan on locking in returns on several of our current positions and immediately selling more premium. In addition, I plan to add at least one more stock to the portfolio, which will bring our total to seven stocks. I also intend on continuing to ladder our positions in perpetuity, so we are collecting premium on a weekly basis. As it stands, we have positions due to expire over the next four consecutive weeks.



Other than that, there really isn’t much to say at the moment. We continue to be pleased with the overall mechanics of our approach and more importantly the overall return, which currently stands at 145.7%.

Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.

Relatively new in the investing space, yieldcos give income investors a great way to participate in the renewable energy market.

Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.

Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.

Anytime we do a bit of spring cleaning in the portfolio—like the round prompted by February’s correction—I like to review our rules for selling.

Cabot Stock of the Week is a great way to build a diversified portfolio of the top growth, undervalued, momentum, international, dividend and small-cap stocks selected for current market conditions from seven Cabot investment advisories.