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Stocks surged Wednesdayon the back of a ceasefire agreement between the U.S. and Iran, and Fundstrat’s Tom Lee says a rebound to record highs could be in the cards. “I think the bottom’s in because last week was a period where the war was getting worse and oil was going up, but stocks weren’t going down,” Lee, head of research at Fundstrat Global Advisors, said on CNBC’s ” Closing Bell .” “Today now we have the rate of change, that the war is de-escalating,” he added, noting that stocks are “in the process” of returning to their all-time highs. Lee is calling for the S & P 500 to hit 7,300 by the end of the year, suggesting a jump of 7.6%. The major averages ended Wednesday with sharp gains after the ceasefire deal between Washington and Tehran pushed oil prices lower. The 30-stock Dow Industrials jumped more than 1,300 points for their best day since April 2025 — back when President Donald Trump dialed back some of his steepest tariffs. West Texas Intermediate crude futures cratered more than 16%, posting the biggest drop since April 2020. Lee expects several sectors to lead the market rally to new highs, including the “Magnificent Seven.” That cohort includes Apple , Alphabet , Amazon , Nvidia , Meta Platforms , Microsoft and Tesla . The researcher also pointed to software stocks alongside the energy and financials sectors as top performers. “That’s the group that’s leading us up,” he said. Lee also said he is watching crypto — specifically Ethereum — which he called “the number one performing asset class” since the start of the war. Even as oil prices are sharply higher than they were before the war, Lee remains optimistic. “The negative correlation to oil was the highest in almost a decade for the Mag 7, Ethereum and software,” he said. “So I think that as oil flattens or cools or the curve flattens, those names are going to get a bid, and they’ve gotten already cheap.” The CNBC Mag 7 Index and the State Street Financial Select Sector SPDR ETF (XLF) both closed more than 2% higher on Wednesday.
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