pre-market trade, we are looking at the major US stock averages and the red and oil rallying after President Trump says he thinks the MOU with Iran is over now.
Trump also saying that the US will probably launch further strikes on the country today, and this could include heart attacks today.
Well, the ceasefire has been on shaky ground for weeks with the US restricting Iranian oil sales as well as launching new attacks after Iran targeted ships in the Strait.
For news yesterday.
Well joining me live here at the New York Stock Exchange to weigh in is Carter Worth, CEO and founder of Worth Charting.
Carter, great to have you here.
Thank you so much for joining me.
Well, here we are counting down to the opening bell here on Wall Street.
We are looking at oil higher again, but we're also looking at US stock futures lower.
So what do you make of what we're seeing in terms of the Middle East right now?
Well, higher is in context for oil, right?
Oil has had a surge to well over.
A collapse to 65 and going up a barrel, $1 or 2 is sort of nothing.
This is all the aftermath as things ultimately get settled and resolved, so I wouldn't read much into it.
I guess the interesting thing is just one be contrarian here and take advantage of the weakness in energy stocks over the 56 past 7 weeks and buy, and that's that's our presumption buy into the weakness in energy stocks.
Yes, and I'm glad you mentioned that because despite all the volatility.
We saw in the first half of 2026, it has been a stellar quarter, stellar year for the major US stock averages.
So when you're looking at the charts from a technical perspective, what are you seeing right now?
Right?
So after any strong advance, think about the move we had in April and May off the March low.
Consolidation, backing and filling is a normal part of how sequencing works.
And so the question is this sideways period.
For the past month, all of June and early July, is that normal resting and consolidating of the preceding two month very strong advance, or is it a stall that suggests we're rolling over?
I'm in that camp, not the pause that refreshes, but the stall that leads to a bigger rollover.
And one thing we do have to keep in mind that today is Wednesday and we will be getting the FOMC minutes later this afternoon and these meeting minutes.
Will be from new Fed chair Kevin Warsh's first meeting.
So given the fact that we've been seeing a lot of volatility with energy prices and in turn higher inflation, what are you paying attention to when it comes to the inflation front, and what is your outlook for interest rates?
Yes, interest rates, as you know, and that's the main thing, because one can't invest in inflation, but one can't make a judgment in the US Treasury market and Rates are pegged.
They're stuck in a good way.
Let's say.
We have never once been above 5% in the past 3 years, and every time we get as low as 4 or high 3s, we come back.
It is and has been a Goldilocks moment and quite long in duration for 10 year yields, and I think that stays.
I mean I'm not in the higher yields camp, so if one has to be directional, I'm a buyer of bonds betting on lower yields.
And let's take a look at what's happening in terms of technology.
We have been keeping an eye on what's happening in tech, especially the AI trade, but there's a lot of moving parts underneath the hood.
So what are you bullish on and what do you bearish on within that trade?
So bifurcation is a fairly rare circumstance and it almost always ends poorly.
We're very bifurcated in tech, as all will know.
You have this extreme move that has continued until the past 4 or 5 days in AI and in semiconductor.
While other areas of technology, notably software, struggle, bifurcation almost always ends, whether it's at the market level or the sector level or a theme level such as this, with generally lower prices.
The strong, sort of runaway names ultimately succumb and the weak names stay weak.
And so you're seeing that now in semis and other high flyers that are coming in, and I would expect more of that and very little in the way of bouncing.
Out of software, so underweight technology is a major theme for us here for the rest of the year.
Yes, and I do want to expand on that very quickly.
We have about 60 seconds here.
So given the fact that we have been seeing this bifurcation with the AI trade, but also we have been seeing days where the Dow continues to rally to new record highs while the Nasdaq is pulling back.
So can you expand on the rotation that you're seeing the rotation.
Markets short term are a popularity contest, right?
Think how we're not talking about precious metals because that was very popular and now it's not.
We're not talking about oil that was popular.
We're talking about it now because of this recent news front, but it's not popular.
Things are in and out of favor.
There is no relationship between earnings and share price on a 136, even 1 year basis.
Long term there's a 100% correlation and so there's always rotation.
People looking for some place to put their money.
Yes, and speaking of which, very quickly, I do want to get your take on what you expect to see in the second half of 2026.
What's most important for you from both a fundamental and technical perspective?
Well, the most important circumstance is the recovery in one major area of the market, which is healthcare, right?
And in particular because it's both aggressive and offensive and defensive.
It has very defensive large cap names that are showing life as well as biotech, which is showing life as well.
And the second is financials.
So on a one month basis, the two best performing areas of the market are financials, up 7% as a sector, and healthcare, trouncing all others, and I think those are two very important themes and we like them going forward.
Yes, and Carter, we will be getting a better picture in terms of financial with earnings season officially underway next week.
So thank you so much for joining us today and thank you so much for all of your insights.
