The S&P 500 currently sits at 7500. Lee was asked whether the market’s hawkish interpretation changed his outlook on a potential correction later this year.
“We still believe later this year there is going to be an abrupt change of market conditions, one that feels very much like a bear market,” Lee said. “But we don’t want to stand and call a top. I think conditions are still favorable for stocks.”
He pointed to the SpaceX IPO as a sign of strength, noting its small float of $90 billion and a steady stream of positive news from the company.
Four Catalysts Lee Is Watching for a Market Shift
Lee laid out specific reasons he expects turbulence later in the year rather than now.
First, he flagged the Fed’s restructuring into five task forces, which he expects to play out in 2026. Second, he pointed to upcoming IPO share unlocks from Anthropic, and OpenAI later this year. Third, he raised concerns about supply chain disruptions tied to the Strait of Hormuz.
“I think the fourth catalyst is that speculative firepower runs out,” Lee said. “That will happen when some things like margin debt experience levels that are associated with short-term corrections. Or it could be that you could see a lot of cash move off the sidelines, but I don’t have any sense that investors are that bullish yet. So to me, I don’t think that fourth piece is in place yet.”
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