Stocks Can Recover From This ‘Heart Attack,’ Tom Lee Says on CNBC

Just because Liberation Day didn’t go as planned, doesn’t mean stocks can’t bounce back and post a V-shaped recovery, Fundstrat Head of Research Tom Lee said. 

Lee pointed out that the White House is negotiating with some of the countries on the tariff list, marking a “quiet return of the Trump put because I don’t think they want markets to continue to have this heart attack,” he said on CNBC’s Squawk Box with Joe Kernen and Becky Quick. 

This year’s tariff turmoil has intensified in recent days, with the S&P 500 down over 10% over the last week. The unveiling of the percentage of tariffs imposed by President Donald Trump on Liberation Day shocked many market participants, leading to ramped-up worries about the potential hit to economic activity. 

Lee said that announcement broke a key covenant of capitalism—markets and businesses need stable and predictable regulations. Many companies in 2018 moved their supply chains away from China to avoid getting caught in tariffs tiff, but now they have potentially trillions of dollars of stranded capital again. That level of “seismic shock” has broken investors’ trust in markets, he added. 

“It doesn’t mean that we can’t see a level of clarity that helps restore that trust,” he said. “But it’s gonna take some time for markets to regain trust.” 

Subscribe to FS Insight research by Fundstrat to learn what a V-shaped bounce has looked like in the past. 

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