Advisors stay bullish yet cautious on stocks heading into second half

For all the stormy headlines about inflation and the Iran conflict, stocks have more than held up with the S&P 500 returning a healthy 10% thus far in 2026.

So with the summer months and the second half of the year staring advisors in the face, what do they expect from equities going forward and where do they see the most compelling opportunities?

Tim Bartlett, chief investment officer of Unique Wealth, for one, expects U.S. equities to remain volatile in the second half of 2026, but still supported by strong fundamentals and double-digit earnings growth for the S&P 500. In his opinion, the most compelling opportunities appear to be in public and private infrastructure, particularly companies tied to AI supply chains and the broader power buildout.

That said, Bartlett does warn that the Federal Reserve remains in a difficult position with inflation still elevated and policy likely to stay data-dependent.

“Any leadership change can create short-term uncertainty because markets prefer consistency, but we expect investors to adjust as the new chair’s approach becomes clearer,” Bartlett said.

Tactically speaking, Batrlett says he is continuing to favor globally diversified portfolios with strategic overweights to Power, AI/Tech, and Infrastructure.

“We still view market weakness as an opportunity for long-term investors to add exposure to high-conviction themes,” Bartlett said.

Similarly, Mark Doehla, portfolio manager at Great Diamond Partners, points out that equity direction tends to parallel corporate earnings growth expectations, which leads him to believe stocks have more room to run in the back half of 2026. Assuming corporate profit projections are attainable, he feels certain sectors leading corporate profit expansion, like technology, should continue to pull up the equity markets overall.

Nevertheless, Doehla adds that his bullish conviction is “somewhat lukewarm,” as inflationary pressure and geopolitical risks on top of an already three-year double-digit stock return trend give him pause and have him preparing for a potential pullback.

“Trimming tech-heavy overweights while keenly monitoring fundamentals in economically broader-based sector baskets like consumer cyclicals, financials, and industrials are our primary focus,” Doehla said.

Doehla adds that he is currently overweight in both international equities and commodities as he carefully monitors domestic equities and fixed income volatility.

Doehla also cautions that market vulnerabilities – like weaker real consumer incomes, higher debt refinancing rates, and corporate margin pressures – are not being fully appreciated by the market today. He worries about high crude oil prices, higher interest rates here and abroad, and narrow equity participation when looking at stock indices behavior.

“We would welcome a definitive pullback of 10% or more to help remove the fast money and reset investor expectations to more earnestly consider the impact of war, tariffs, and asset bubbles. Left unchecked for much longer, these areas we mention could very well be the catalysts that lead us to an uncontrollable, sizable, and prolonged drop in markets on a global scale,” Doehla said.

Finally, Nick Holuta, portfolio manager at Dynasty Financial Partners, also remains constructive on U.S. equities, but in his opinion the story is not the index. It's the rotation underneath it.

“Capital has moved out of mega-cap software and into the physical economy, AI infrastructure, and the broader 493, and we expect that to continue into the back half of the year. We continue to believe we are in the early innings of this transformational AI build out and believe that growth will continue to come from companies powering and supplying this new world,” Holuta said.

Stressed Holuta: “We think the next 12 to 24 months will reward active management, manager selection in private markets, and security selection within sectors in a way they haven't been rewarded in years. That gap between top and bottom performers is already showing up in the data, even if allocations haven't caught up.”