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.

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.

Stocks started this week with a huge rally as the Iran ceasefire deal appears to be the real thing.

Of course, it’s been months of supposed peace deals falling apart. It’s hard to believe. I’m sure that fact is holding the market back somewhat. But this one is different for a couple of reasons.

Stocks are starting off this week with a huge rally as the U.S. and Iran have reached a ceasefire deal.

We’ve been here before. These peace deals have fallen apart several times. I’m sure that fact is holding the market back somewhat. But this one is different for a couple of reasons. First, it’s the furthest a peace deal has gotten with both sides agreeing and independent verification from Pakistan. Second, this is what a peace deal would look like at this point if it’s real and lasting.

[Note: The Cabot Turnaround Letter weekly update won’t be published next Friday, June 19, due to the market being closed for the Juneteenth holiday.]

Before we get into the main topic for today’s newsletter update, a quick note on the portfolio is in order. I’m continuing our “spring cleaning” effort that we began last week by trimming a couple more of our holdings, but I’m also adding a new position to take the place of the recent deletions.

After two near-record-setting months, stocks are encountering their first real turbulence since March. It’s no surprise.

While stocks go up an average of 10% a year, they rarely do so in a straight line. And after the S&P 500 rallied nearly 20% in April and May and the Nasdaq shot up nearly 30%, a pullback of some kind – or possibly even a true correction – was to be expected. It seems it’s happening all at once.

Stocks look set to enter the summer near all-time highs, but leadership has narrowed, volatility has ticked up, and there’s been renewed scrutiny on the AI trade and valuation concerns in some of the market’s biggest winners.

At the same time, the macro backdrop remains a mix of resilience and intermittent turbulence. While economic data continues to hold up, energy prices remain elevated due to the ongoing Iran conflict – which has no end in sight – keeping upward pressure on inflation and yields.

Tech, commodity, AI, and Explorer stocks struggled this week as concern over capital expenditures increased. Mideast tensions intensified and inflation numbers came in yesterday at their highest rate in over three years, fueled by rising energy costs. The combination of anticipated higher interest rates and rising bond yields impacted the price of precious metals, with gold sliding below $4,200 an ounce and silver falling below $64 an ounce.

Stocks look to enter summer near all-time highs, but leadership has narrowed and volatility has ticked up thanks to renewed scrutiny on the AI trade and open-ended questions about valuations in some of the hottest areas of the market.

There’s also been more focus on the evolving macro landscape, which features a resilient U.S. economy but stubbornly high energy prices due to the ongoing Iran conflict, and somewhat elevated yields. We’re now looking at a higher likelihood of a Fed rate hike, with the odds of a hike by December now well over 50%.

The high-flying AI stocks got crushed on Friday. But those stocks started this week higher. Where do we go from here?

The technology-heavy Nasdaq index fell 4% on Friday, and the S&P 500 fell for the week for the first time in 10 weeks. A couple of things spooked investors. The AI trade turned sour after Broadcom (AVGO) reported earnings that included slightly lower revenue projections for its AI chips than were expected. Also, a blowout jobs report strengthened the case for a Fed rate hike by the end of the year.

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 cancer therapy development company Immunome (IMNM) has several of the qualities I look for in biotech.

Sell a Quarter of J.M. Smucker (SJM)

WHAT TO DO NOW: The market was clearly a bit giddy this time last week, and a correction of some sort was overdue, which is exactly what we’ve seen in recent days. To this point, our indicators are positive, and most stocks are “just” pulling back within uptrends, but there is some abnormal action, and a few long-time leaders are cracking. Today we’re going to sell Corning (GLW), booking a solid profit and leaving us with around 42% in cash.

WHAT TO DO NOW: After selling some Marvell Technology (MRVL) earlier this week, today we’re doing the same with Dell (DELL), taking partial profits by selling a third of our holdings, and aiming to give the rest plenty of rope to correct and consolidate. Our cash position will now be around 35%.

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.

A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.

A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.

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.

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.

Our Cabot Top Ten Trader’s market timing system consists of two parts—one based on the action of three select, growth-oriented market indexes, and the other based on the action of the fast-moving stocks Cabot Top Ten features.