After a spike in market volatility in February and March, when the U.S. and Israel launched the war in the Middle East, the closely watched VIX Volatility (Fear) Index has fallen back below its historical average of 20, this as the 1Q EPS season kicks into high gear. Meanwhile, stock prices have recovered from correction territory and continue to crawl higher, with the S&P 500 at an all-time high. We can't say that the recent jump in the VIX a huge surprise. Indeed, in our 2026 Market Outlook, we noted that investor complacency was high, the upcoming Fed chairman transition could be rocky, the AI innovation revolution may stall, and that stock valuations were susceptible in the event of a sell-off in the Information Technology sector. That was our Bearish Case. Our Base Case called for another year of growth in the U.S. economy (and no recession), a modest decline in interest rates, and double-digit EPS growth. Since each of the planks in the Base Case are currently in place, there's reason to expect that equity prices can continue to push higher. Back to the market, the current fear index reading is south of 19.0, which is below historical average of 20 and is consistent with a period of equity market strength. Indeed, during the long bull market in the 2010s, the VIX averaged 18 and even touched lows below 10 in 2017. We continue to think that the S&P 500 is in the mid-stage of a bull run that dates to October 2022. And while the path for equities won't be straight up, we suggest investors favor domestic large-cap growth stocks in their portfolios at the current market and economic juncture.

The major indices have bounced about today, initially mixed on U.S./Iran ceasefire hopes that turned into ceasefire worries, then lower on hot inflation data (which dampened the outlook for a cut in interest rates), and now higher again on renewed hopes for an ingoing ceasefire. Keep you belts fastened folks, although we note that the VIX volatility index thankfully has fallen back to about 20 after rising above 27 earlier in the week. Meanwhile, crude oil is at about $99/barrel, up from $97 earlier in the day but better than $116 earlier in the week.

Wall Street is focused on rotation. Mag7 was in, now is out, but remains "in mind" for most investors. So which companies and which sectors are rising to the top so far this year in what has been a volatile start to 2026? We used our Argus screening tool to see which stocks are trading the most above their 52-week low. The sectors and companies that appear below give us clues about which sectors are weathering the current rocky conditions the best, and which might continue to do so if conditions remain challenging. The results show that there has been rotation, but often within the Information Technology sector, as IT remains the group with the most companies represented. Here are the stocks in the Argus coverage universe that are riding the rotation merry-go-round, with the percentage above their 52-week low also noted.

Stocks are broadly lower at midday, but have clawed back from the worst of the early session lows. News from the Middle East is dominating the headlines, as a new wave of attacks has led to fears of a growing conflict, both geographically and in time.