"‘Super Bull’ Tom Lee: US stocks often bottom out at the early stages of war, and this round of correction is nearing its end."

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The recent sharp fluctuations in US stocks may be approaching a turning point. Fundstrat founder and head of research Tom Lee released a report to investors on the last trading day of the first quarter, stating that the market has digested most of the downside risks, and the current correction is more than 90% complete.

Lee cited historical data, pointing out that the S&P 500 index usually bottoms in the early stages of a war, rather than at its conclusion, because investors tend to price in adverse risks quickly. He also questioned the forecasts of some pessimistic institutions, claiming that those bearish views on the S&P 500 are "far from reality."

Trump's comments on his Truth Social platform on Tuesday were interpreted by the market as a signal of de-escalation, and the S&P 500 soared 2.9% that day to 6,528 points. Lee noted that the market's rapid response precisely reflects investors' extremely cautious positions, and once risk sentiment improves, the rebound could be significant.

Historical Rule: War Early Stages Are Often Buying Opportunities

Lee reviewed seven major conflicts since 1900 and found a remarkable pattern: the S&P 500 index typically bottoms within the first 10% of the war's duration.

The logic behind this is that investors are accustomed to "pricing in adverse risks in advance," rather than continuing to mark down valuations as events unfold.

Based on this historical pattern, Lee believes the current market situation is similar to the early stages of a war. Fundstrat technical strategy director Mark Newton judged that the S&P 500's short-term low is in the 6,200–6,300 range.

Lee himself went further, explicitly stating "we are much closer to the bottom than those making pessimistic warnings think," and expects a V-shaped rebound after this sharp decline.

Limited Impact From Oil Price Shock, US Shows Resilience

On the market's greatest concern, high oil prices, Lee holds a relatively optimistic view. He pointed out that, as a net oil exporter, the US actually benefits from rising oil prices. Even if West Texas Intermediate crude (WTI) rises to $100 per barrel, it is still far below historical highs when adjusted for inflation.

Lee provided specific data: the nominal high for oil prices in the summer of 2008 was $144 per barrel, but since then inflation has risen about 53%, meaning WTI would need to rise to $220–$240 per barrel to match the historical record in terms of real purchasing power.

In other words, the current $100 oil price, when adjusted for inflation, is still below the average level since the beginning of this century.

In addition, Lee added that increased wartime defense spending contributes $20–30 billion of incremental GDP per month, offsetting some of the economic pressure caused by high oil prices.

Technical Indicators and Position Signals Both Point to Bottom

Sentiment indicators also provide technical support for Lee’s judgment.

He noted that the current put-call ratio for stock options is 0.9, which is equivalent to the level seen in April 2025, when the Trump administration announced new tariff policies and the market hit a short-term low.

This indicator is usually regarded as a measure of market panic, and the current reading shows investor defensive sentiment has reached an extreme level, which has historically often corresponded to a market's short-term bottom area.

Combined with the current extremely cautious positions, Lee concluded: "We have already completed 90%–95% of this round of decline."

Risk DisclaimerThe market has risks, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the individual user's specific investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article fit their particular circumstances. Invest accordingly, and the responsibility is your own. ```