A veteran stock market strategist and co-founder of Fundstrat, Tom Lee, often referred to as the "Wall Street Oracle," believes the current position of the U.S. stock market, and global equity markets overall, is stronger than when they reached their previous all-time highs earlier this year. He firmly predicts that the S&P 500, a key U.S. benchmark index, could surge powerfully to 7,300 points in the short term before experiencing any significant downward correction. As of Wednesday's close, the S&P 500 settled at a record high of 7,022.95. The Nasdaq Composite Index, which includes a broad range of technology stocks, jumped 1.6% on Wednesday, also closing at a new high. This marked its eleventh consecutive day of gains, the longest such streak since December 2019.
An important trend for retail investors to note is that after initial volatility and heavy selling, Wall Street's institutional investment forces appear to be tuning out war-related noise. Instead of viewing geopolitical conflict as the "core variable determining market direction," as was the case in early March, Wall Street has largely begun to "ignore the noise of battle." The narrative driving the current new bull market rests on three key pillars: the resilience of corporate earnings demonstrated in the latest U.S. earnings season, a resurgence in risk appetite led by the technology/ AI computing power theme, and the market's judgment that Middle East disruptions will not evolve into long-term, 2022-style inflation. As long as these three logical pillars remain standing, Wall Street will continue to treat war-related headlines as trading noise.
Tom Lee is one of the few strategists on Wall Street in recent years to have accurately predicted the S&P 500's bull run multiple times. Notably, he correctly forecast the bull market for U.S. stocks from 2023 into 2024 amidst widespread pessimism at the end of 2022, earning him the "Wall Street Oracle" moniker from investors. Looking ahead, Lee firmly believes technology stocks will remain the strongest leading force in the next super bull market phase.
Lee, a head of research and chief investment officer, shared his optimistic outlook in a media interview, pointing to several factors that bolster his confidence in equities. He cited three primary reasons for his bullish stance: the exceptional earnings resilience shown by the U.S. market amid soaring oil prices, continuously upward revisions to profit expectations for global tech companies, and the diminishing threat of inflation. "What gives us comfort now is that this geopolitical war is actually stimulating the economy," Lee stated in a recent interview. He added that Fundstrat's historical analysis of spikes in WTI and Brent crude prices suggests the impact on core inflation (excluding food and energy) may be less severe than initially feared by the market.
The veteran strategist described the U.S. market as "the best house in a deteriorating neighborhood," noting that major U.S. manufacturing facilities continue to operate while traditional factories in other Western nations often face shutdowns. Lee repeatedly emphasized that the current position of U.S. and global stock markets is stronger than at their previous peaks earlier this year. He pointed out that this is the seventh "black swan" event investors have faced since 2020, yet the U.S. economy has proven "fully capable of weathering a geopolitical disaster erupting in the Middle East," even with constrained trade routes and oil supplies.
Regarding Middle East geopolitical developments, news also leans positive. On April 15th local time, an Iranian Foreign Ministry spokesperson stated that Iran-U.S. dialogue continues through Pakistan as an intermediary. The White House Press Secretary confirmed ongoing contact and negotiations, describing them as "constructive" and expressing optimism about reaching an agreement.
Despite acknowledging that tail risks persist, Lee stressed that "the actual size of the tail has shrunk considerably." His view aligns with the emerging consensus among Wall Street strategists: the Street is beginning to filter out war noise, and bullish sentiment towards tech stocks centered on AI computing infrastructure is heating up. The dominant investment narrative has shifted from "will Middle East geopolitical conflict crush risk assets?" to an optimistic story of "tech stock leadership driven by a strong earnings season."
Stocks directly tied to AI computing infrastructure—often tagged with both "earnings certainty" and "high beta" attributes—such as the "AI computing super group" led by Nvidia, TSMC, AMD, and Broadcom, are typically the most sensitive, first to move, and see the largest gains during broad market or tech sector rebounds. The core logic is robust: this segment is directly linked to record-breaking AI capital expenditure from tech giants, not just speculative stories. AI hyperscalers (super cloud computing giants like Google, Microsoft, and Amazon) continue their capex arms race. As long as they "prefer taking on debt and conducting layoffs over retreating from the AI capex competition," the leaders of the entire AI computing supply chain maintain their investment appeal.
"The market is essentially pricing in a bullish view that the Persian Gulf war appears to be over," wrote Steve Sosnick, Chief Strategist at Interactive Brokers, in a Wednesday research note. Top Wall Street traders are currently downplaying negative developments in the Middle East, choosing to continue allocating to equities. Institutional investors are seen as the core force behind the current stock market recovery. These investors seem to believe that Middle East shocks are more like a manageable oil price disruption rather than an event that will morph into a systemic supply crisis. They reason that as long as conflict does not破坏 U.S. earnings resilience, permanently push oil prices into an失控 range, or force the Federal Reserve to turn fully hawkish, its damaging impact on stocks is temporary.
"It seems that neither the stock market, nor financial markets more broadly, are particularly worried that the Strait of Hormuz remains essentially blocked," said Doug Peta, Chief U.S. Investment Strategist at BCA Research. According to Mark Hackett, Chief of Investment Research at Nationwide, institutional investors are the key driving force behind this equity market recovery. After an initial aggressive sell-off, market attention has returned to corporate fundamentals during earnings season, which he views as very supportive.
Tom Lee acknowledged credible concerns about commodity supply shocks, including potential helium supply disruptions. However, he suggested that a durable ceasefire could foster very positive sentiment for growth and recovery, thereby minimizing any economic damage to the U.S. Lee agrees with a typical assessment from financial giant JPMorgan Chase: the technology sector, centered on AI computing infrastructure, must lead the next major upswing in the stock market's super bull phase. He emphasized that since the outbreak of the Iran conflict, the best-performing assets have been Ethereum and Bitcoin—often seen as a barometer for risk appetite—which are also highly correlated with the tech sector. These were followed by energy stocks benefiting from geopolitical tensions, the "Magnificent Seven" U.S. tech giants like Nvidia and Google, and software companies that experienced a record plunge in February.
"When people worry about growth prospects, technology often becomes the sole driver of growth," Lee explained. He added that the tech sector has been the most underweighted by investors following portfolio liquidations. On valuation, Lee believes significant price declines in the first quarter have made tech stocks increasingly attractive relative to their strong earnings growth potential. Lee stated that these fundamentally sound tech companies—the leaders in the AI computing supply chain—possess "real moats" and their earnings growth trajectories consistently outpace that of the S&P 500, positioning them as primary beneficiaries of the AI adoption super-cycle. "Five years from now, I think people will be surprised they could buy these fundamentally strong tech stocks at such cheap prices," he predicted.