MW One of Wall Street's biggest optimists says investors should hang tight because Trump wants the stock market to rally

By Barbara Kollmeyer

Fundstrat's Tom Lee says don't underestimate White House

Welcome to "Liberation Day" Wednesday, which some investors are hoping will mark the end of tariff uncertainty, though that's probably not going to be the case.

Our call of the day is from the ever-optimistic co-founder and head of research at Fundstrat, Tom Lee, who says stock market investors should not despair because President Donald Trump is intent on a rally for equities, as he offers several reasons why that's the case.

At the crux of Lee's latest prediction is the view that most have it wrong if they think Trump doesn't care about stocks.

Last month, the U.S. leader said that he "can't watch the stock market," as he tries to "build a strong country" and comes as other top officials including Treasury Sec. Scott Bessent also have said they were not focused on Wall Street.

But Lee recently said that he saw signs of a Trump "put" emerging, referring to the theory that the White House would alter policies if stocks fell too much, and he seems to be doubling down on that with his latest prediction.

The strategist said Trump likely wants to see a market rally because it would validate his tariff negotiations. Lee noted that the White House appears anxious that the tariff plan could implode, citing a Politico report that lays out a potential blame game if things go awry.

Trump also wants a rally because of signs of waning public support via some polls, as well as weak surveys on consumer sentiment and manufacturing that place the blame on tariff stress, says Lee.

Also, a stock market crash could lead to an expensive recession, which would require substantial fiscal stimulus in order for the economy to recover.

U.S. companies also would need "friendly" capital markets, rather than a declining stock market, to help on-shoring activity that comes from tariffs, the strategist adds.

Lee has earned some respect on Wall Street for nailing the S&P 500's 2023 finish and coming pretty close in 2024. His call for 2025 was that the S&P 500 SPX would close the year at 6,600.

The markets

U.S. stock futures (ES00) (YM00) (NQ00) are lower, with Treasury yields BX:TMUBMUSD10Y BX:TMUBMUSD02Y steady and gold (GC00) marching higher.

   Key asset performance                                                Last       5d      1m      YTD     1y 
   S&P 500                                                              5633.07    -2.49%  -2.51%  -4.23%  8.21% 
   Nasdaq Composite                                                     17,449.89  -4.50%  -4.57%  -9.64%  7.45% 
   10-year Treasury                                                     4.189      -16.80  -9.20   -38.70  -16.60 
   Gold                                                                 3147.7     4.00%   7.46%   19.26%  35.62% 
   Oil                                                                  71.14      1.72%   7.15%   -1.02%  -16.94% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

Tesla $(TSLA)$ first-quarter deliveries are expected to be released on Wednesday, and many analysts are braced for softer numbers.

Private-sector payroll data is due at 8:15 a.m., followed by durable orders and factory orders at 10 a.m.

Shares of conservative TV outlet Newsmax $(NMAX)$ are taking a breather after a surge of 2,230% in its first two trading days.

New Jersey Democratic Sen. Cory Booker spoke for 25 hours in a record-breaking Senate speech to protest Trump's sweeping legislations.

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The chart

Strategists at Societe Generale says two-thirds of the S&P 500 pullback is due to artificial intelligence views. They show a chart showing points added to the S&P 500 thanks to AI, which earlier this year they calculated at 700. They now expect at least half of this premium to go, taking 350 points off the index until U.S. tech finds a new driver. The bank has lowered its S&P 500 target for 2025 to 6,400 from 6,750, citing a pause in "American exceptionalism" that will stick around until technology stocks find a new growth driver to replace AI.

Top tickers

These were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern:

   Newsmax  Security name 
   TSLA     Tesla 
   NVDA     Nvidia 
   GME      GameStop 
   PLTR     Palantir Technologies 
   NMAX     NewsMax 
   AAPL     Apple 
   TSM      Taiwan Semiconductor Manufacturing 
   MLGO     MicroAlgo 
   AMZN     Amazon.com 
   NIO      NIO 

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-Barbara Kollmeyer

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April 02, 2025 06:59 ET (10:59 GMT)

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