Stocks closed moderately lower yesterday, but all of the major indexes closed higher for the month.

After another spectacular earnings season, which officially came to an end last week after NVIDIA posted blowout results, stocks have taken a bit of a breather.

But I'm expecting a strong rally for the rest of the year. In fact, I'm expecting a 30% gain in the S&P this year.

Last year saw the S&P 500 gain 16.4%. That was on top of 2024's 23.3%, and 2023's 24.2%.

The historic AI tech boom has been leading the way.

And it's reminiscent of the dot-com tech boom in 1995-1999 when the market surged by double-digits each year for 5 long, glorious years in a row, resulting in a 220% increase for the S&P, while plenty of individual stocks were up several hundred percent to several thousand percent.

I believe we could see the same thing again now.

And so does legendary trader Paul Tudor Jones. In a recent interview, he said the AI-driven bull market still has "another year or two to run," and compared it to the late 1990's tech boom.

That has been my sentiment all along, and comports with my expectation that we'll see 5 years in a row of double-digit market gains, just like we did back then.

This year (2026), would be year 4, while 2027 would be year 5. But nobody says it has to stop there.

With AI being touted as the most transformational tech breakthrough ever, it could very well last much longer.

Moreover, as I mentioned up top, I think we could be up 30% or more by year's end.

Since 1988, only five times has the S&P had an annual gain of 30% or more. Just 5 times over the last 38 years.

But did you know that 2 of those 5 times happened in the 1995-1999 dot-com boom?

In 1995, it was up 37.6%. And in 1997 it was up 33.4%.

And the last time we saw a 30% gain was back in 2013.

We're due for one, in my opinion.

Plus, with the AI boom being even bigger than the dot-com boom, driven by real earnings and real growth, if there ever was a reason to see a 30% gain, now is the time.

Given it's currently up 'only' 12.3% YTD, I think the best is yet to come for the rest of this year.

But that doesn't mean there won't be volatility along the way.

Increased tensions in the Middle East over the weekend, when the U.S. struck Iranian missile launchers in the Strait of Hormuz, amid Iran's continued aggression toward its neighbors, lifted oil prices yesterday. But not that much.

Last week's Jackson Hole speech, where new Fed Chair Kevin Warsh sounded more hawkish since he assumed the role, also weighed.

But a softer Personal Consumption Expenditures (PCE) index (the Fed's preferred inflation gauge) helped temper talk of raising rates. And that buttresses the Fed's wait and see approach as inflation has not meaningfully ticked up. Instead, it has modestly eased.

But the next Fed meeting is only a couple of weeks away on September 15-16. And we will soon find out the Fed's next move.

In the meantime, stocks are trading near all-time record highs.

And it won't take much to send prices to new all-time highs.

See you tomorrow,