Fundstrat’s head of research Tom Lee says the trend for US stocks is strengthening, with the S&P 500 likely to rise above 7,700 by the end of the year.
In a new CNBC interview, Lee he says improving profit margins, profitability driven by artificial intelligence and reducing political risk can help boost sales growth.
“To me that means that I think in the stocks of the year that the interest rate is going up. I think that the S&P above 7700 is very possible.”
Lee also points out that the possibility of reducing tensions in the Middle East could lower the price of oil that goes into oil prices, which he says would help boost business. Lower energy prices could reduce inflation and boost sentiment across financial markets, especially if investors are growing confident that global risks are easing.
Lee adds that strong earnings prospects are another key pillar of his growth strategy. Investors will be watching whether American companies can continue to grow profits after the stock market’s recent rally. He added that productivity gains tied to artificial intelligence could provide another boost to margins and revenue growth.
The analyst has remained one of Wall Street’s most optimistic voices on the economy as markets weigh heavily on corporate earnings, AI interest and changes in the economy in 2026. His latest forecast shows he believes the streak will continue into the second half of the year.
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