Major Bull Tom Lee: Ceasefire Means US Stocks "Bottoming Out" and May Lead to a "Decisive" Rebound

The announcement of the Iran-U.S. ceasefire agreement is reshaping market expectations for risk assets.

Wall Street’s biggest bull, Tom Lee, co-founder and head of research at Fundstrat, said Thursday that the deal to reach an Iran-U.S. ceasefire eliminates the possibility of large-scale bombing campaigns, meaning that the bottom in the U.S. stock market has been “already established.”

In his daily macro brief, he noted that if the S&P 500 can move back above its 200-day moving average, the market will most likely see a “decisive upside breakout.”

As of now, the E-mini S&P 500 futures continuous contract is trading well above that key technical level, up nearly 2.5% to 6820 points—far above the current level of about 6617 points on the 200-day moving average.

On the boost from the ceasefire news, Tom Lee reiterated his optimistic stance on a range of risk assets, including the “Magnificent Seven” (Mag7) in U.S. stocks.

For energy stocks and basic materials stocks, Tom Lee is also bullish, but he acknowledged that, affected by a sharp overnight drop in oil prices, these sectors may face some near-term pressure.

Ceasefire durability remains in question; market disagreements emerge

Not all market watchers have the same level of confidence in the ongoing durability of the ceasefire deal. Tom Holland, deputy global research director at Hong Kong asset management and research firm Gavekal, expressed clear reservations in an investor report published on Wednesday.

His concerns mainly center on the significant discrepancy between the statements issued by the two sides after the ceasefire announcement—the 15-point peace plan proposed by the White House in March versus the 10-point plan disclosed by the Iranian Supreme National Security Council’s affiliated news outlet, which differ materially in content.

Tom Holland is among the many observers questioning whether shipping traffic through the Strait of Hormuz can recover to pre-war levels in the short term. This uncertainty remains a potential risk that the market needs to keep monitoring.

Risk warning and disclaimer

        Markets are risky; invest with caution. This article does not constitute personal investment advice, nor does it take into account any individual user’s specific investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are consistent with their particular circumstances. You assume responsibility for any investment made based on this.