Ultimately, I believe that stocks continue to attract inflows, all things being equal.
The Nasdaq 100 has been sideways over the back half of the first half of trading in 2026, but it’s been a very bullish move to the upside. Ultimately, though, I think we’re just killing time, waiting for a reason to go higher. The artificial intelligence trade, of course, is something that could come or could go, but regardless, I think you have a situation where we are just killing time, perhaps even sleepwalking through most of the summer before continuing the upward trajectory.
There are concerns about the Federal Reserve raising rates twice between now and the end of the year, but that’s been the story all along, and we’ve managed to rally quite nicely. With this being said, I think we have a two-speed market here. The beginning of the second half will be sideways, followed by a breakout. Eventually, I think we’ll go looking toward 33,000.
The Dow Jones 30 is doing better, but you can see it sees some pushback once you get above 52,000. We are in the process of trying to get rid of that selling pressure. I think that makes sense because it certainly looks like industrial companies in general are doing fairly well. If we get interest rate hikes, that can have an influence, but now you’re talking about blue chip companies, you’re not talking about jumping out on the risk spectrum with technology companies that aren’t profitable or barely are.
So these are real things, these are real companies. I like the idea of buying short-term pullbacks between now and the end of the year, as long as we can stay above 50,000. If we give that back, then we probably have a very volatile and difficult second half of 2026.
The S&P 500 is acting very much like the Nasdaq 100. Not a surprise, it’s only the same handful of companies that move this market for the most part. So structurally speaking, it’s just the slower version of the Nasdaq 100 at this point. The market looks very much like the Nasdaq 100 as far as the idea of working off froth is concerned. We went straight up in the air starting in April, and then went sideways. I think we probably have a little bit more sideways action, but ultimately, this is a market that will be higher by the end of the year, all things being equal.
Now, obviously, there are circumstances that could come into the fold, maybe the United States and Iran start shooting at each other again, at least for real and not these small attacks. Who knows, maybe the Federal Reserve sounds like it’s a lot more hawkish than even people think. My suspicion, though, is that the market has already made up its mind and it’s going higher; it just depends on your time frame. Between now and New Year’s Eve, it wouldn’t surprise me at all to be somewhere closer to the 8,000 level.
Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.