Tom Lee: S&P 500 expected to rise to 7,700 points before a correction, with a strong rebound anticipated after the midterm elections

According to BlockBeats, on May 29, Tom Lee, Chairman of BitMine, the largest Ethereum treasury, stated in an interview with CNBC that the significant rise in US stocks since April this year was largely due to corporate earnings exceeding expectations. He pointed out that the market previously expected S&P 500 component stocks to report first-quarter earnings per share (EPS) of about $70, but the actual figure reached $80, exceeding expectations by $10 in a single quarter, which, when annualized, corresponds to approximately $40 in incremental earnings. This implies that the S&P 500 Index theoretically has around 800 to 1000 points of upside potential.

He maintained his previously proposed "three-phase market" view: In the short term, the S&P 500 is likely to rise further to around 7,700 points; subsequently, the market may enter a phase of consolidation and digestion before October, facing challenges such as the inauguration of the new Federal Reserve Chairman Waller, shocks in energy prices, and liquidity pressures brought by large IPOs from companies like SpaceX, OpenAI, and Anthropic. Tom Lee noted that these factors could lead the market to a bear market-like correction, but he expects US stocks to regain strength after the mid-term elections and believes that 2027 could become "one of the best years for returns in a lifetime."

In addition, he pointed out that as rising oil prices fuel inflationary pressures, the bond market has shifted from betting on rate cuts to betting on rate hikes. Against this backdrop, many sectors are facing greater pressure, as most industries still require a dovish Federal Reserve for support.