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Energy Stocks Surge on Iran War, Traders Grow Cautious

Energy stocks have risen nearly 34% in 2026 due to the U.S.-Iran war, but traders are growing cautious. On CNBC's 'Halftime Report,' experts warned that the rally may not be sustainable, with risks from both a prolonged conflict reducing demand and a swift resolution triggering a market rally. Joe Terranova suggested reducing energy exposure ahead of President Trump's deadline on the Strait of Hormuz. Stephanie Link sold Chevron stock after significant gains, investing instead in technology firms. Analysts believe energy is overextended and advise taking profits. The caution reflects broader market uncertainty amid geopolitical tensions.

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Energy Stocks Surge on Iran War, Traders Grow Cautious

Energy stocks have surged approximately 34% in 2026 amid the U.S.-Iran war, but traders on CNBC's "Halftime Report" are now advising caution, citing potential risks from a prolonged conflict or swift resolution.

Market Surge Driven by Conflict

  • Oil prices have risen sharply since the U.S.-Iran war began in early 2026.
  • The energy sector has outperformed, with stocks gaining about 34% year-to-date and nearly 8% since the conflict's start.

Trader Insights and Warnings

  • On CNBC's program, traders highlighted growing caution towards energy investments.
  • Joe Terranova, chief market strategist at Virtus Investment Partners, indicated that trimming energy exposure might be prudent, especially if President Donald Trump's deadline for Iran to open the Strait of Hormuz results in a broad market rally.
  • Sarat Sethi, managing partner at Douglas C. Lane & Associates, noted that a prolonged war could lower energy company earnings as demand cools.
  • Stephanie Link, chief investment strategist at Hightower Advisors, sold her position in Chevron after a 32% gain in 2026, redirecting funds to technology stocks such as Marvell Technology and ServiceNow, stating that energy is overextended.
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