Fundstrat’s Tom Lee Sees 2026 Market Growth Driven by Deregulation, Tax Cuts

Fundstrat’s Tom Lee has expressed optimism about the stock market this year, highlighting numerous opportunities for investors. In a recent interview, Lee emphasized the resilience of US businesses in the face of various challenges, including the pandemic, rate hikes, and tariffs. He believes that the current 10-Year yield at 4% is manageable for both the government and businesses, allowing companies to earn a return on capital. Looking ahead to 2026, Lee is optimistic about several factors that could drive market growth, including deregulation, the resolution of tariff issues, potential tax cuts, and improved trade partnerships with other countries. These developments, according to Lee, could lead to significant earnings upside for US companies.

Lee also noted that the market has been relatively flat year-to-date through May, suggesting that investors have not missed out on significant gains. He believes that there are still many opportunities to buy stocks, particularly those that have been severely impacted by recent market conditions. Lee mentioned that there are numerous washed-out names that present attractive investment opportunities, including stocks from the Magnificent Seven, such as Tesla, Meta, Alphabet, Amazon, Apple, Microsoft, and Nvidia, as well as small-cap stocks. According to Lee, these stocks offer potential for substantial returns as the market continues to recover and grow.