2H 2026 Market Outlook Preview – “In Some Years, Bull Riding Is Harder”

Good evening, everyone.

Next Tuesday at 6 PM Central, Troy, Charles, and I will be hosting Oak Harvest’s Second Half 2026 Market Outlook via YouTube livestream.

Tonight isn’t our outlook. Think of this as the movie trailer.

We’ll review what we expected coming into 2026, what actually happened, and what our team believes investors should be watching as we enter the second half of the year.

The good news? Our primary outlook for 2026 remains intact.

The bad news? If our outlook remains correct, the ride may get bumpier once again before this cycle is over.

Our title for 2026 back in December: “In some years, bull riding is harder.”

And year to date, 2026 has certainly been one of those years.

PART ONE: LOOKING BACK: HOW DID THE FIRST HALF OF 2026 PLAY OUT?

Let’s start with the scoreboard. The S&P 500 is up roughly 10% year-to-date.

Sounds easy. It wasn’t.

During the first quarter investors endured a 6 week and roughly -10% correction tied to the Iran conflict. Since that low, the SW&P500 has rallied more than +20%.

We warned investors about market volatility in our original 2026 outlook.

Not a bear market. Not a recession. But a bull market with more volatility.

A bull that tries to buck investors off its back. And that’s what we got in the 1h26. But in reality, this kind of move lower isn’t unusual. Let’s revisit Charlie Bilellos data on market downturns and their frequency.

One of the biggest mistakes investors make is assuming volatility means something is broken. History says otherwise. Average frequencies of market declines. These occur even in secular bull markets.

A -5% decline happens almost every year.

A -10% correction happens roughly every 18 months.

A -20% bear market occurs about once every four years.

Volatility is normal. Not enjoyable for most, but normal.  It’s the admission price for long-term stock market returns and trying to compound your savings above inflation.

WHAT DID WE GET RIGHT?

Back in December our team highlighted three major tailwinds.

Number one:

Earnings

At year-end, FactSet expected strong earnings growth. Since then?

Those earnings estimates have gone even higher. Fourth quarter 2026 earnings expectations have risen from roughly $82.50 per share to more than $90 per share.

That’s over a 10% increase in just six months.

Number two:

Economic Resilience

Despite war headlines and inflation fears, the overall consumer held up better than expected. Tax refunds helped offset higher energy costs. AI spending remained exceptionally strong. And economic growth accelerated in 2q off a 1q slowdown.

Number three:

Interest Rates

While rates remain higher than in the last 5 years, they have stayed contained below 5%, allowing earnings growth to remain the primary driver of stock prices. No PE expansion help in 2026, just EPS growth.

Those three tailwinds largely explain why the market continues making new highs.

THE SECOND HALF OF 2026

Now let’s talk about why you’re watching and should tune in next Tuesday. What’s next?

Our team’s outlook boils down to three major tailwinds and three major headwinds.

TAILWIND #1 EARNINGS ARE STILL ACCELERATING.

This remains the most important chart in the market. Corporate earnings.

FactSet currently projects:

• Q2 earnings growth: 22%
• Q3 earnings growth: 25%
• Q4 earnings growth: 23%

Full-year 2026 earnings are expected to grow more than 23%. 2027 earnings are projected to rise another 16%. Those are not recession numbers. Those are expansion numbers.

Remember:

Over long periods of time stocks follow earnings. Not politics. Not headlines. Not social media. Earnings.

TAILWIND #2 INTEREST RATES REMAIN CONTAINED

FINANCIAL MARKETS INFLATION CONCERNS PEAKED AT THE END OF THE 1Q. Here’s the 2-year BE inflation rate for the last 10 years.

Overall, the 10-Year Treasury has moved higher in yield. But it is not enough to derail earnings growth. At roughly 4.4%, rates are about 50bps higher YTD but manageable.

Using a simple valuation framework, today’s earnings estimate still support current market levels. Despite many doomer predictions of market collapse, stocks are not wildly disconnected from earnings fundamentals.

TAILWIND #3: FALLING ENERGY PRICES

The third tailwind is energy. Energy prices have collapsed from their first-quarter spike.

That acts like a tax cut for consumers for the rest of the summer.

Lower gasoline prices mean more money available for spending elsewhere.

Historically, that supports both consumer spending and corporate earnings.

HEADWIND #1: PEAK GROWTH MAY BE APPROACHING

Here is the quarterly FactSet EPS progression.

This is the biggest risk investors are missing. Not earnings.

The growth rate of earnings.Notice the difference.

We believe peak earnings growth likely occurs in the third quarter of 2026.

After that, earnings may continue rising…But at a slower pace.

Markets often struggle when growth accelerates less rapidly than before.

Deceleration can be difficult for investors to digest. Sometimes great, isn’t good enough.

For the second quarter, S&P 500 companies are expected to report year-over-year growth in earnings of 21.9% and year

over-year growth in revenues of 12.0%.

For Q3 2026, analysts are projecting earnings growth of 25.3% and revenue growth of 10.7%.

For Q4 2026, analysts are projecting earnings growth of 22.8% and revenue growth of 10.2%.

For CY 2026, analysts are projecting earnings growth of 23.2% and revenue growth of 11.0%.

For CY 2027, analysts are projecting earnings growth of 16.2% and revenue growth of 7.6%.

HEADWIND #2: A NEW FED CHAIRMAN

History shows markets often test new Federal Reserve chairmen.

Alan Greenspan. Paul Volcker. Jerome Powell.

Each experienced meaningful market volatility during their first year. Investors should pay close attention to inflation expectations, and policy decisions later in summer of 2026.

HEADWIND #3: THE DOT-COM ANALOG

Many of our viewers know we’ve been comparing today’s AI investment cycle to the late 1990s technology cycle for almost 15 months now.  Our thoughts, If it is a bubble? It was early in the spending cycle and we wanted to be invested in its beneficiaries.

The comparison remains surprisingly close. If that historical roadmap continues, we may currently be entering the early ninth inning.

That doesn’t mean the game is over. It does mean investors should recognize that late-cycle opportunities often come with late-cycle volatility.

OUR WORKING THESIS

If we had to summarize our outlook for the 2h206, in one sentence, it would be this:

Strong third quarter. More difficult fourth quarter.

In fact, we would not be surprised if the second half becomes a mirror image of the first half. Strong markets into late summer. New highs.

Then increased volatility as growth rates begin slowing and investors focus on 2027.

CLOSING

So what does all this mean for investors?

For now, It means the bull market remains alive.

Earnings remain strong. Interest rates remain manageable.

And AI-driven capital spending continues supporting economic growth.

But it also means investors should expect volatility.

The later stages of bull markets are often the most profitable…and the most emotional.

That’s exactly what we’ll be discussing next Tuesday.

JOIN US LIVE

📅 Tuesday, June 23, 2026

🕕 6:00 PM Central

🎙️ Troy S, Charles S, and Chris P

YouTube Channel @OakHarvestFinancialGroup

Register your questions ahead of time here: https://click2retire.com/2h2026-register

We’ll cover:

• The complete Second Half 2026 Market Outlook
• Stocks, bonds, energy, and interest rates
• AI, earnings, and valuations
• Portfolio positioning ideas
• Live Q&A

If you enjoy our content, subscribe to the channel and join us Tuesday night.

Because in some years, bull riding is harder. And 2026 may still have a few surprises left.

I’m Chris Perras. Thank you for watching, and we’ll see you Tuesday night.

Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free visit: https://click2retire.com/lets-connect