US stocks have been in a sharp uptrend since early April, but a Wall Street veteran, Tom Lee, says they are poised to extend gains further in the weeks ahead.
Historically, the month of August brings weakness in the benchmark S&P 500 index – but the head of research at Fundstrat Global believes this year will be meaningfully different in that regard.
In fact, the market expert believes the S&P 500 will surpass the 6500 level by the end of 2025 and the much-anticipated 7,000 level over the next 12 months.
His bullish call is significant since the benchmark index has already rallied 28% over the past four months.
Why does Tom Lee remain bullish on the S&P 500 index?
According to Tom Lee, the recent jobs data – while soft – is a positive setup for US stocks.
The labour market has been weakening for months, and the latest figures simply confirm what investors already suspected, he told CNBC in a recent interview.
The latest employment report, he believes, makes it easier for the Federal Reserve to make a dovish pivot in the fall, potentially stimulating key sectors like housing.
This will in turn strengthen the US economy into next year, the strategist argued, adding the post-jobs-data pullback in the benchmark S&P 500 index should be viewed as consolidation rather than reversal.
Following a cosmic run since early April, Lee dubbed the pause a launchpad for further gains.
His bullish stance is underpinned by expectations of Fed support, improving housing dynamics, and resilient consumer demand.
Note that the index, compared to its pre-April high of roughly 6,150, is up only 3.0% at writing.
What’s the Street-high target on the S&P 500 for 2025?
What’s also worth mentioning is that Lee doesn’t only expect near-term upside in the benchmark index.
Over the next 12 months, he even sees it exceeding the closely-watched 7,000 level – mostly in line with what Oppenheimer told clients in its latest research note.
The only difference: Oppenheimer sees the S&P 500 surpassing that level even sooner (by the end of this year).
Its 7,100 year-end target on the index indicates potential upside of another 12% from here.
Oppenheimer announced its Street-high target on the S&P 500 following a series of trade deals the White House announced with Japan and the European Union, easing tariff-related uncertainties.
According to the firm’s chief strategist, John Stoltzfus, strong corporate earnings and resilient economic growth will drive US stocks up further in the second half of 2025.
He believes inflation is moderating and expects the Fed to hold rates steady, creating a favourable backdrop for equities.
If realised, the 7,100 target would mark a third consecutive year of double-digit gains for the benchmark S&P 500 index.
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