So here's the thing about markets: sometimes they get a little too emotional. According to Tom Lee of Fundstrat Global Advisors, that's exactly what happened in February. The market got all angsty about AI, and Lee thinks it was "overly pessimistic." He's betting that March is when things start to look up again.
Lee shared his thoughts on CNBC's 'Closing Bell' over the weekend, suggesting investors are missing the forest for the trees. "I think investors are losing sight of the bigger picture, which is that when it comes to the global implications of AI," he said. His view is pretty straightforward: the U.S. and potentially China are positioned to be the main creators and beneficiaries of this technology, which should ultimately benefit the S&P 500.
But let's talk about the elephant in the room: Nvidia Corp. (NVDA). The company had a monster earnings report, but the stock had a disappointing week anyway, declining 7.41% over the past five days. Lee called it out directly, expressing his disappointment with the performance. His take? He predicts a period of consolidation and rerating for the company's stock price. It's not a collapse; it's a pause.
Beyond individual stocks, Lee pointed to a broader issue: credit. He acknowledged that private credit has been a problem for a while now. His suggestion? The Federal Reserve might need to take another look at its interest rate policy in light of these persistent issues. It's a nudge to the central bank to consider what's happening on the ground.
Despite all the nervous chatter, Lee is sticking to his optimistic guns. He's calling March a "turnaround month" and doesn't buy the idea that the economy is slowing down. In his view, any talk of a "growth scare" is more about investors demanding a higher "risk premium"—basically, wanting to be paid more for perceived risk—than it is about actual economic weakness.
The Bull vs. The Warning Signs
Lee has been a notable bull. Earlier this year, he forecasted the S&P 500 could reach 7700 by the end of 2026, though he also warned of a possible 15-20% correction in the latter half of the year. In February, he defended high equity prices, arguing the market deserves to re-rate higher and pushing back against claims that this is the most expensive market ever.
But not everyone is sipping the same optimistic tea. The recent strength in precious metals, with gold outperforming the S&P 500 for seven straight months, might be a signal that some investors are seeking shelter. More directly, SkyBridge Capital founder Anthony Scaramucci has warned of bigger risks from weakening capital flows. He's called the recent pullback a "capital boycott" as global investors reallocate funds. Scaramucci even pointed to what he described as Warren Buffett moving $400 billion out of the market as a warning sign, though data shows sovereign wealth funds and public pensions still invested about $132 billion into the U.S. in 2025.
Adding to the weekend's tension, markets reacted sharply to geopolitical news. Dow futures fell 428 points (0.87%) Sunday evening, while S&P 500 and Nasdaq futures dropped more than 1%. The moves came as markets digested news of high-intensity U.S. and Israeli strikes on Iranian military targets.
In terms of recent performance, the numbers show the pressure. Over the past month, the SPDR S&P 500 ETF Trust (SPY) fell 1.35%, and the Invesco QQQ Trust (QQQ), which tracks the NASDAQ, fell 3.01%.
So, the stage is set. On one side, you have Tom Lee looking at the AI landscape and market jitters and seeing a buying opportunity, a temporary risk premium, and a March turnaround. On the other, you have warning flags from gold, concerns about capital flows, and geopolitical shocks moving futures. It's a classic market debate: is this noise, or is it a signal? Lee is betting heavily on the former.
