US stocks have been in sharp uptrend since late March and the momentum is unlikely to slowdown in the second half of 2026, says CFRA’s chief investment strategist Sam Stovall.
In his latest report, Stovall maintained that the benchmark S&P 500 index will reach 7,730 by year-end, indicating potential upside of another 4% from current levels.
Backed by strong historical precedents and improving market breadth, he believes the current bull run is built on resilient, earnings-driven foundation capable of defying typical seasonal headwinds.
Why CFRA expects US stocks to extend gains in H2
Stovall’s positive view for the second half of 2026 is primarily rooted in historical data on how the index performs following exceptionally strong starts to the calendar year.
Through late June, the S&P 500 notched an impressive 24 all-time highs – placing the first half of this year securely among the top twenty opening halves since World War II.
“In 2H of these prior top-20 years, the S&P 500 gained an additional 6% and rose in price 80% of the time,” the CFRA expert told clients.
This historical momentum is further reinforced by a substantial pullback in global energy prices.
West Texas Intermediate (WTI) crude, which spiked past $110 earlier this year amidst geopolitical conflicts, has retraced sharply to near $70 per barrel, providing an unexpected, immediate tailwind for both corporate profit margins and consumer discretionary spending.
What else signals continued momentum ahead?
While critics previously weaponized the market’s heavy concentration in mega-cap semiconductor giants as a sign of structural fragility, the rally’s dynamics shifted constructively in June.
Market leadership has broadened noticeably, with capital flowing vibrantly into previously lagging sectors like financial services and health care.
This expansion indicates a healthier, more sustainable bull market, according to Sam Stovall.
Plus, despite brief seasonal anxieties regarding the massive scale of corporate spending on artificial intelligence infrastructure, stellar financial reports from bellwethers like Nvidia and Micron have legitimized valuations.
Stovall noted that the S&P 500’s forward price-to-earnings (P/E) ratio of 21x is reasonable because the rally is anchored by “genuine” corporate earnings growth – not speculative, unstable multiple expansion.
Sector strategies: what may drive the next leg up
For investors looking to maximize strategic returns, CFRA dubbed tech and industrials the absolute prime destinations, fueled by insatiable global demand for AI infrastructure.
The industrial sector has already surged an impressive 16.8% this year, spearheaded by standout performers like Generac, which has more than doubled in 2026.
Meanwhile, tech remains an absolute juggernaut, rallying over 25% year-to-date. The tech universe has produced exponential gains, led by SanDisk’s jaw-dropping near eight-fold explosion.
Other critical hardware and semiconductor players – including Micron, Intel, Western Digital, Seagate, Dell, and Marvell – have all surged over 200%, establishing a robust baseline that should shield the broader index from any minor macroeconomic corrections as the back half of the year closes.
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