Source: Jin Shi Data Tom Lee, Chief Investment Officer of Fundstrat, dubbed the “Wall Street Guru,” described the US stock performance in 2025 as the “least popular V-shaped rebound.” He indicated that while the S&P 500 index (SPX) is expected to reach the 7000-point mark by the end of the year, investors remain clouded by pessimism, a sentiment typically observed only during severe bear markets.

Investor pessimism in 2025 comparable to past bear markets In a recent analysis released on Fundstrat's YouTube channel on October 21, Tom Lee highlighted that the persistent negative investor sentiment is a key anomaly in the current market. He specifically noted recent survey data from the American Association of Individual Investors (AAII), which shows that the number of bearish investors exceeds that of bullish investors—a trend that has persisted throughout 2025. “The last three times we saw such a depressed negative sentiment were in 1990, 2008, and 2022, all of which were bear markets,” Tom Lee remarked. He compared this entrenched fear with the market’s actual performance: “Investor behavior suggests we are in a bear market, yet the S&P 500 has risen 13% this year. Thus, I call it the ‘least popular V-shaped rebound.’”

Corporate earnings resiliency fuels market gains Tom Lee’s bullish viewpoint hinges on the resilience of corporate earnings. He pointed out that thus far in this earnings season, 84% of S&P 500 constituent companies have exceeded expectations, with robust performances from major banks like JPMorgan Chase (JPM) and Goldman Sachs (GS) acting as significant catalysts. Lee believes that this juxtaposition of “widespread fear and strong fundamentals” provides strong momentum for a significant market rise.

S&P 500 likely to breach 7000 points by year-end On October 22, Tom Lee further elaborated on his perspective during CNBC's “Closing Bell” program. He predicted that due to “underpositioned investors being forced to capitulate,” the market will experience a late-year “follow-the-leader rally.” He reiterated his target for the S&P 500 index: “I believe all these factors imply that the S&P 500 will close at least at 7000 points by year-end.” He added, “In fact, I think this figure is conservative.” Looking ahead, Tom Lee mentioned several catalysts over the next 12 months, including the anticipated Federal Reserve easing cycle, increased clarity around artificial intelligence driving earnings growth in major tech stocks, and the eventual recovery of the ISM manufacturing index, which has contracted for 32 consecutive months.

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