The S&P 500 and Nasdaq both reached new all-time highs this week, erasing losses tied to the US-Iran conflict that had rattled markets since January. The S&P 500 closed at 7,022.95 on April 15, topping its previous record set on January 28. The Nasdaq closed at 24,016, also a new record.
Just in today.
Tom Lee who accurately called for ATH’s this month, reiterates we will see 7,300 on the $SPX in the near term then we might see a 15-20% drawdown after, before a Q4 rally back to ATH’s at 7,700 to close the year.
So timeline looks something like this:
7,300…
— Heisenberg (@Mr_Derivatives) April 16, 2026
Tom Lee, founder of Fundstrat, appeared on CNBC’s Closing Bell to explain why he believes the market is now in better shape than it was at those earlier peaks. He laid out three specific reasons.
His first point was about oil prices. Oil surged above $100 per barrel following the closure of the Hormuz Strait. Lee acknowledged this was a headwind but argued the US economy was handling it better than most.
“I believe the stock market today is in a better state than it was at the beginning of last year,” Lee said. He pointed out that while high oil prices are dragging on other countries, the US market has largely absorbed the pressure.
Oil prices did pull back somewhat after initial gains, as markets factored in hopes of a de-escalation between the US and Iran.
Lee’s second reason focused on earnings. He said corporate profits have remained strong since the conflict began, which he sees as evidence the war has so far stimulated rather than damaged the US economy.
Defense spending is a key part of that equation. Lee noted the US is spending roughly $30 billion per month on defense, with potential to double to $60 billion. That spending is flowing directly into the economy.
He compared that to the oil price burden, which he estimated costs US households about $12 billion per month collectively — a net positive for the economy overall, in his view.
Tech companies have posted solid results in the first quarter of 2026, beating analyst expectations in several cases. That has helped justify current valuations on the Nasdaq.
Lee’s third argument addressed inflation fears. Many analysts have warned that $100+ oil will feed into broader price increases. Lee pushed back on that view.
“Looking back at the history of oil price volatility, the impact on core inflation numbers is less than we anticipated,” he said. He believes the inflation shock may be smaller than markets are pricing in.
During the weeks of market decline, many institutional investors stayed on the sidelines and built up cash. With indices now at new highs, those investors face pressure to deploy that capital or risk falling behind their benchmarks.
Lee maintained his S&P 500 year-end target of 7,300, which would represent roughly 4% upside from current levels.
Bitcoin and other crypto assets have historically moved in line with tech stocks during periods of broad risk appetite, and onchain data has shown renewed inflows into institutional Bitcoin products in recent weeks.
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