Tom Lee: The S&P 500 index will first reach a new high before entering a bear market, and is expected to hit 7,300 points by the end of March.

Gate News Report, March 16 — Analyst Tom Lee said in an interview with CNBC that after experiencing mostly narrow fluctuations this year, the S&P 500 Index (the benchmark for the U.S. stock market) will continue to rise in the coming weeks, but the U.S. stock market will enter a bear market this year, although it will first climb to new record highs.

Lee warned that stock market bears may fully emerge near the end of the year. He stated, “Our view is that when the market stops reacting to good news, a decline will occur. I believe software stocks, the ‘Big Seven’ U.S. tech giants (Apple, Microsoft, Google, Amazon, Nvidia, Meta, Tesla), and cryptocurrencies have already experienced a bear market, which has squeezed out a lot of speculation. Our judgment is that the market will actually rise before the end of the month, closing March higher, perhaps reaching 7,300 points. A bear market may appear later this year.”

Regarding oil prices, Lee explained why soaring oil prices are positive for the stock market: “First, the U.S. is an oil exporter, and the economy will benefit net from rising oil prices. Second, other countries are importers, and the U.S. should perform well relative to growth, with funds flowing back into the U.S. Third, when global growth becomes scarce, people will buy growth stocks, and the U.S. stock market is a growth stock index, with funds flowing back to the U.S. from other parts of the world.”