Tom Lee, the head of research at Fundstrat Global Advisors, believes that the current stock market presents a buying opportunity for investors. Lee argues that much of the bad news, such as concerns about President Donald Trump’s tariff plans and their potential economic impact, has already been factored into stock prices. “I am optimistic.
I mean, I can understand why investors are sitting on their hands … they don’t really know how severe these tariffs are gonna be, how long they are,” Lee said. “But, now we’re seeing a big price correction. A decline in sentiment.
And then, something like today, we got a bad ADP jobs report, and the market is actually up.”
Lee explained that when stocks rise on bad news, it indicates that the market has already priced in a lot of negative factors. He believes it is “very possible” that March, April, and May could be “huge rally months,” with stocks potentially rising 10% to 15%. This week, all three major averages slid more than 1% each to start the month, as President Trump’s tariffs and retaliatory tariffs on U.S. goods weighed on investor sentiment and future profits.
Tom Lee’s optimistic market outlook
The S&P 500 is now down 1.5% in 2025, and the Nasdaq Composite briefly fell into a 10% correction from its recent high. However, on Wednesday, all three indexes rallied, rebounding from their two-day slide, as White House concessions toward automakers soothed investor spirits.
We already know stocks will bottom before bad news peaks,” Lee said. And so, if we’re seeing the market not fade on bad news, that means we’ve already priced in a lot of things that would scare us.
Lee also noted that retail sentiment has reached bearish levels comparable to the fall of 2022, suggesting excessive pessimism. “Retail sentiment is at the levels that were at the depths of that recent bear market,” Lee said.
“Investors view this as a crisis when it’s really a growth scare.”
While acknowledging employment challenges ahead, Lee identified potential investment opportunities, particularly in financial stocks. I think sleeper winners from all of this are going to be the financials because they’ve underperformed the last 15 years,” he said, noting that many banks have demonstrated profitability despite challenging conditions. Lee also highlighted opportunities in digital assets and small-cap companies, particularly those focused on the American market, which could benefit from lower interest rates and attractive valuations once tariff concerns subside.
Overall, Lee’s outlook suggests that now might be an opportune time for investors to consider buying stocks, as the market appears poised for a recovery despite lingering uncertainties.
