Svmuu reported that Fundstrat strategist Tom Lee stated in a CNBC interview that the current market is in a cycle that could be divided into three phases, with the second phase potentially seeing a correction resembling a bear market.
Lee, known for his long-standing bullish stance and successful calls on bull market trends in recent years, now believes the short-term market path will not be smooth sailing.
As of early June, the S&P 500 index has risen nearly 11% year-to-date, despite challenges including early-year skepticism over AI prospects, and inflationary pressures from the Iran war pushing up energy prices.
Lee pointed out that corporate earnings significantly exceeding expectations are a key driver of the market rally. The market had generally anticipated first-quarter earnings per share (EPS) of around $70, but actual figures came in at about $80.
He noted that if this trend continues, it would add roughly an additional $40 in EPS for the full year, potentially pushing the S&P 500 index up by another 800 to 1000 points.
According to Lee's assessment, the first phase still favors an upward trend. With the S&P 500 index slightly above 7,560 points as of June 3, 2026, he sees room for short-term upside, possibly rising to around 7,700 points.
The second phase could arrive soon and become the market's “digestion period.” In the CNBC interview, Lee stated: “Between now and October, the market needs to digest multiple factors.” The sources of pressure he listed include policy uncertainty stemming from the new Federal Reserve chair, energy shocks (especially shortages of petroleum products and lubricants), and additional stock supply from IPOs and lockup expirations of companies such as SpaceX, OpenAI, and Anthropic. (Jin Shi)