The S&P 500 is heading to a new high, and Bitcoin shows the way. That's what Tom Lee, head of research on Fundstrat Global Advisors, laid down in a market segment this week, where he broke why he thinks the rebound to crypto points directly to the more reversed for equities.
It came as investors were guarding for the federal reserve decision, as stocks returned slightly on Monday. Tom said it was under. He reminds the viewers that he called 5500 for the S&P 500 weeks ago, and the market struck without objection.
“Bitcoin is above the April 2th level,” Tom said. “Bitcoin tells us that the S&P is supposed to be able to recover to the 5800 level in the near term. It's still upside down from it.” He taught how crypto performance tend to lead to risk-on sentiment, and this pattern is still intact.
Tom Lee says tariff fears are rapidly fading
Tom said that even though tariff fears could be resurface, the picture of MacRO looks better now than it was done in early April. He said April 7 was the climax for tariff panic and conditions ever improved. Tom also taught signs from other possessions that led to stocks.
Credit markets, high yield bonds, and VIX are all stress -reduced signals. “The high yield has recovered almost all expansion that has occurred since April 7,” he added.
Tom explained that the structure of the VIX term is upside down today, telling him that volatility is relaxing. He said setting the stage for stocks moving higher.
At the forefront, he said 2026 offers potential confidence, especially if there is a deregulation and a better comparison for corporate revenues. If new tariff policies open the door to more exports, then revenues can get another strengthening.
Tom does not pretend that the rally on new highs will be easy even. “The bar for recovery at all times is of course higher,” he said, but it is clear that the current setup is favorable. “The risk reward is still really positive here,” he added. He said the market could still go higher, even in all noise.
Tom Lee pointed to crypto and goods for direction
Tom said companies have proven that they can hold shocks. He pointed to the covid, inflation, and even the Fed's aggressive rate. “Companies have survived a bullwh economic impact. They survived a flow to inflation. They survived Fed hiking at the fastest rate ever,” he said. He hopes to beat the forecasts again, especially if conditions are stabilized.
Tom lists the names that are dragging the market -Tesla, the wonderful seven, and Bitcoin -but said they all have been reversing now. “They have begun to recover,” he said, before being stressed again that Bitcoin had already preceded the price of April 2 and that was the biggest clue that stocks should follow.
Fundstrat's Tom also stabbed the fed for sitting in their hands while the European Central Bank was already cutting rates. He said the ECB inflation measurement left shelter costs. If the Fed did the same, Tom said, “The main inflation here is less than Europe.” However, US interest rates are 125 basis of points lighter than the ECB, which he said makes no sense.
He said the argument for the Fed was easy to see to start cutting today, even before the full impact of the tariffs appeared. But he also asked if Trump's pressure could have a boxed chair Jerome Powell. If inflation goes down but the growth slows down, Powell may be blamed. “It stamped him to possibly be autumn man,” Tom Says.
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