We're going back to a stock pickers' market, says DCLA's Sarat Sethi

Summary

Sarat Sethi of DCLA discusses a market pullback driven by rising oil prices, higher Treasury yields, and geopolitical risk. He argues the market is now fairly valued and shifting into a stock picker's environment after previously lagging groups recovered. He is cautious on broad technology and hyperscaler spending as a show-me story, and he names Salesforce as a favored software idea based on valuation, embedded enterprise position, agentic AI partnerships, and cash flow.

• Futures are pressured by higher oil prices, rising Treasury yields, and geopolitical risk.
• Sethi sees the broader market as fairly valued and no longer deeply bifurcated.
• He expects a stock pickers' market with pockets of opportunity.
• Technology earnings were strong but tech stocks need to show ROI on hyperscaler spending.
• He likes Salesforce after multiple compression and enterprise software durability.
• He flags inflation, real price increases, and K-shaped consumer risks into the fall.