Surging oil prices due to the U.S.-Iran war have boosted energy stocks in 2026. Some investors are worried that the rally can’t last. On CNBC’s ” Halftime Report ,” traders said they were growing more cautious on the sector, which has jumped around 34% in 2026 and has advanced almost 8% since the start of the conflict in the Middle East. As investors await President Donald Trump’s 8 p.m. ET Tuesday deadline for Iran to open the Strait of Hormuz, Joe Terranova said trimming some exposure to energy stocks might make sense, particularly if the deadline leads to an end of the war and a sharp rally higher in equities. “What’s in front of us is the possibility that if you get that good news, you are going to have a powerful rally,” said the chief market strategist for Virtus Investment Partners. “What do you do with that? If you’ve had hedges in place — whether it be oil, or fertilizers, or defensive positioning — I think you pare that back at some point today.” .GSPE YTD mountain .GSPE year-to-date chart. Meanwhile, Sarat Sethi noted that if the war goes on longer than anticipated, it could lower the earnings of energy companies as demand cools. “I think that’s the right call, to start taking some money off energy at these levels because pretty much the right discount rate has been priced in there,” the managing partner at Douglas C. Lane & Associates said. Stephanie Link, chief investment strategist at Hightower Advisors, sold her position in Chevron . While she believes it’s a great company, she was happy with the roughly 32% gain on the stock in 2026 alone. She bought Marvell Technology and ServiceNow instead. “I just think that energy is overextended and I would encourage people to take some profits,” she said. CVX YTD mountain CVX year-to-date chart.
Energy has soared since the Iran war began. These traders are now cautious
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